Market Outlook: GBP May Face Pressure if BoE Cuts Rates More Than Expected

Forex - Derek Halpenny from MUFG Bank stated that the Pound could be impacted by the possibility of the Bank of England reducing interest rates more than the market expects. Halpenny emphasized that market pricing for interest rate cuts this year appears to be "very cautious" and that the Pound may underperform against non-dollar currencies in the later part of the year. The Pound was the worst-performing G-10 currency on Thursday, following an unexpected downward revision in the UK manufacturing purchasing managers' index for December and a sharp rise in natural gas prices, which moderately increased bets on interest rate cuts for February. GBP/USD rose by 0.1% to 1.2395 after hitting a low of 1.2349, the lowest level in eight months. EUR/GBP remained stable at 0.8294.