Sterling Steady in Holiday Lull Amid BoE Rate Adjustment

The British pound remains steady against the dollar and euro during thin holiday trading. Recent decisions by the Bank of England, including an interest rate cut, have influenced its strength. While the Federal Reserve may continue easing, upcoming manufacturing data will provide further economic insights.

In a calm holiday trading period, the British pound maintained its steadiness against both the dollar and the euro, with few events scheduled to influence its movement until the New Year. Sterling was observed to increase slightly by 0.07% against the dollar, positioning just below its three-month high from last week.

The pound showed marginal improvement relative to the euro, standing at 87.12 pence to the common currency, not far off from its recent peak since October. Trading activity around the Christmas season in Britain remains minimal, continuing this trend as the New Year approaches.

Investor focus remains on the recent Bank of England meeting, where policymakers narrowly voted for an interest rate cut. The Bank suggested that the gradual reduction in borrowing costs might slow down, potentially keeping the pound robust against other currencies, especially as the Federal Reserve is expected to ease further next year. Key manufacturing, inflation, and employment data will soon provide fresh economic perspectives.

(With inputs from agencies.)