The British pound fell in the European market on Thursday against a basket of global currencies, extending its losses for the second consecutive day against the US dollar, moving away from its two-month high, under pressure from accelerating correction and profit-taking, in addition to the continued recovery of the US currency from multi-year lows.
This decline comes ahead of the Bank of England’s monetary policy decisions at the conclusion of its sixth regular meeting of 2025, where interest rates are widely expected to be left unchanged at 4.00%, the lowest level since February 2023.
Price Overview
GBP/USD today: The pound fell by 0.15% to $1.3609, from an opening of $1.3626, with a high of $1.3636.
On Wednesday, the pound lost 0.2% against the dollar — its first decline in three days — due to correction and profit-taking, after earlier touching a two-month high at $1.3727.
US Dollar
The US dollar index rose about 0.2% on Thursday, marking a second straight gain, continuing its recovery from a 3½-year low of 96.22, reflecting renewed strength in the greenback against a basket of global currencies.
Beyond bargain-hunting from lower levels, the dollar’s rebound followed a cautious Federal Reserve stance regarding further interest rate cuts in the coming period.
The Fed cut rates by a quarter point on Wednesday, as widely expected in global markets, and signaled that borrowing costs would be reduced steadily for the rest of this year.
Fed Chair Jerome Powell described the latest policy move as a “risk-management cut” in response to labor market weakness, but noted the central bank does not need to rush into deeper monetary easing.
UK Interest Rates
Following mixed inflation data on Wednesday, market pricing for a 25-basis-point BoE rate cut at today’s meeting remained below 20%.
Bank of England
Global markets widely expect the Bank of England to announce on Thursday that it will leave interest rates unchanged at 4.00%, the lowest since February 2023.
The BoE interest rate decision, monetary policy statement, and the vote breakdown are due at 12:00 GMT.
Governor Andrew Bailey will hold a press conference at 12:30 GMT to comment on the policy meeting’s outcome, the inflation battle, and the future path of interest rates.
Outlook for the British Pound
At Economies.com, we expect that if the Bank of England and Andrew Bailey deliver less hawkish comments than markets anticipate, odds of a rate cut in November will rise, leading to further declines in the pound.
