- The Pound Sterling (GBP) trades cautiously as the Bank of England (BoE) maintains a gradual approach to policy easing.
- BoE officials stress the need for a careful reduction in monetary policy restrictiveness amid persistent inflation concerns.
- GBP/USD remains strong above 1.2900, supported by improved risk sentiment and a weaker US Dollar.
Pound Sterling Trades Cautiously as BoE Maintains Gradual Rate Cut Approach
The Pound Sterling (GBP) trades cautiously against its peers on Thursday as Bank of England (BoE) officials reaffirm their “gradual and cautious” approach to policy easing while testifying before Parliament’s Treasury Committee on Wednesday.
BoE Monetary Policy Committee (MPC) member Megan Greene emphasized the need for a “gradual path” in removing monetary policy restrictiveness, given the persistence of inflation. Meanwhile, BoE Chief Economist Huw Pill stated that more efforts are required to “squeeze out” underlying inflationary pressures.
GBP/USD Forecast: Pound Sterling’s Technical Corrections Expected to Stay Limited
GBP/USD extended its rally for a third consecutive session on Wednesday, gaining nearly 0.8%. The pair has surged approximately 2.5% this week, reaching its highest level since November, trading above 1.2900.
A shift toward risk appetite put pressure on the US Dollar (USD), enabling GBP/USD to maintain its bullish momentum. Market sentiment improved following news that US President Donald Trump granted a one-month exemption for the US automotive industry from the 25% tariffs imposed on Canada and Mexico. Additionally, Trump signaled a potential extension of exemptions to certain agricultural products, further boosting market confidence.
