The Pound Sterling (GBP) experienced a notable retreat following a surprising drop in UK inflation, which registered below market expectations. This unexpected downturn has shifted trader focus toward the Bank of England’s (BoE) upcoming decisions, particularly regarding a potential rate cut today and the likelihood of further easing in subsequent meetings. The GBP/USD exchange rate has reflected this sentiment, prompting analysts to reassess their forecasts for the currency pair.
Commerzbank's Head of FX and Commodity Research, Thu Lan Nguyen, emphasized that the softer inflation figures are likely to influence BoE policy, potentially resulting in a more dovish stance. This shift in monetary policy outlook could lead to increased volatility in GBP trading as investors reposition themselves ahead of the BoE's announcements, while the EUR/GBP pair may also see heightened activity amidst these developments.
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Data Source: FX Killer Analysis Team Updated: 2025-12-18 10:26
Disclaimer: This article is for reference only and does not constitute investment advice. Forex trading involves risks; please make decisions carefully.