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Dollar Dips, Pound Rises on Rate Cut Bets
3 Dec
Summary
- GBP/USD gained over half a percent due to dollar weakness.
- Fed rate cut expectations and dovish commentary weakened the dollar.
- Bank of England rate cut bets are increasing for December.
The GBP/USD currency pair saw a notable increase, trading up by over half a percent on Wednesday as the US dollar weakened significantly. The dollar index dropped below the 99 mark for the first time in over two weeks, primarily driven by increasing expectations of a Federal Reserve interest rate cut. Further pressure on the greenback came from speculation surrounding a potential Chairman known for his dovish economic views.
In the United Kingdom, recent economic indicators, including softer inflation figures and signs of a cooling labor market, have bolstered the likelihood of an interest rate cut by the Bank of England in December. This anticipation of a BoE rate cut could potentially create a headwind for the GBP/USD pair moving forward.
As of the latest reports, GBP/USD was trading at $1.3281, marking a 0.54% increase for the day. Concurrently, on the NSE, GBP/INR futures showed a similar upward trend, trading at 120, which represents an almost 1% gain on the day.
