At the start of the new week the price of the pound/dollar found some stability above the psychological 1.2500 level, after last week’s intense fluctuations. The accommodative stance of the Bank of England (BoE), which kept the bank rate at 5.25%, made it difficult for the pound to attract significant demand. However, a sell-off in the US dollar, triggered by the latest disappointing data from the US, provided enough support for the cable to consolidate above 1.2500.
BoE Governor Andrew Bailey expressed optimism about the path to a possible rate cut, noting some positive signs on inflation. However, recent comments from key Federal Reserve figures have tempered enthusiasm. Neel Kashkari, president of the Minneapolis Fed, maintained a cautious stance, not ruling out further rate hikes this year. Additionally, Michelle W. Bowman, a member of the Fed’s Board of Governors, stressed on Friday her reticence to justify immediate rate cuts, highlighting the need to see substantial improvements in inflation data for several months.
