British Pound's Steady Trajectory Amid Rate Cut Speculations

The British pound held its ground against the dollar on Friday, marking its fourth consecutive week of declines. Investors are grappling with the prospect of further interest rate cuts from the Bank of England, driven by anxieties over slowing global economic growth.

On Thursday, the pound plummeted to a five-week low of $1.2666, only to bounce back by 0.5% as the dollar faced increased pressure. This downturn in sterling results from volatile global market activities, triggered by weak U.S. jobs data last week, which has stoked fears of an economic slowdown and more substantial rate cuts from the Federal Reserve.

Last week, the BoE cut rates for the first time since 2020, reducing borrowing costs to 5%. Money markets indicate traders are anticipating further rate cuts of 42 basis points from the BoE by year-end. The pound also firmed against the euro, holding steady in the wake of recent market turmoil.

(With inputs from agencies.)