Pound Sterling rallies on BoE’s hawkish outlook, upbeat market sentiment
==========
The Pound Sterling (GBP) has rallied on the Bank of England's (BoE) hawkish outlook and improved market sentiment. The BoE is expected to start reducing interest rates after the Federal Reserve (Fed) and the European Central Bank (ECB), and the risk-appetite of market participants has improved. Recent statements from Fed Chair Jerome Powell, ECB President Christine Lagarde, and BoE Governor Andrew Bailey indicate that the Fed and ECB are more explicit about rate cuts, while Bailey avoided speculation on rate cuts and warned of potential price pressures in the second half of the year. The GBP/USD pair is clings to gains but could face volatility ahead of the US Nonfarm Payrolls (NFP) release for January. The Pound Sterling is strengthening amid hopes that the BoE will begin rate cuts later than the Fed. The market sentiment is cheerful, and the BoE didn't express much about interest rate cuts in its monetary policy announcement. However, higher interest rates are expected to continue to hinder economic growth in the UK. The US Dollar remains on the backfoot ahead of the NFP data. The outlook for the UK economy is more vulnerable now as longer restrictive monetary policy could fade business optimism and discourage fresh investment plans. The US NFP report, which will be published at 13:30 GMT, will be closely watched for its impact on the market. The estimates suggest that US employers hired 180K workers in January, lower than the previous month's 216K recruitments. The Unemployment Rate is expected to increase to 3.8% from the previous reading of 3.7%. The Pound Sterling is set to extend its rally toward the resistance level of 1.2800, supported by multiple tailwinds. The Bank of England's decisions have a significant impact on the Pound Sterling, and its monetary policy is influenced by the achievement of its primary goal of price stability. Economic data releases, such as GDP, Manufacturing and Services PMIs, and employment figures, also influence the value of the Pound. The Trade Balance is another important indicator for the Pound, as a positive net balance strengthens the currency. However, a negative balance weakens it. The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) and is issued by the Bank of England (BoE).
#PoundSterling #BankOfEngland #InterestRates #FederalReserve #EuropeanCentralBank #MarketSentiment #UsNonfarmPayrolls