Markets Await Bank of England Meeting

GBP: The British Pound remained stable as markets awaited today's BoE meeting. Global signs of easing inflationary pressures have sparked speculation that the UK central bank might cut interest rates. Financial markets are currently pricing in over a 65% likelihood that the BoE will reduce rates from their 16-year high of 5.25%. However, investors are cautious about the BoE making an immediate move due to persistently high services inflation in the UK.

EUR: The Euro remained steady as inflation in the eurozone increased again in July, casting doubt on a potential ECB rate cut in September. Data released by Eurostat yesterday indicated that the preliminary estimates of the Harmonised Index of Consumer Prices in the Eurozone rose by 2.6% year-on-year in July, up from 2.5% the previous month.

USD:?The U.S. Dollar faced significant losses after Federal Reserve Chair Jerome Powell suggested that a September rate cut was possible, given the more favourable inflation and labor market data. His remarks led markets to almost fully price in a 25-basis point cut in September, with a slight possibility of a 50-basis point cut.

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