Ella 
In early Asian trading on Thursday, GBP/USD remained weak at around 1.2495. The U.S. dollar rose for a third day in a row, weighing on GBP/USD. Traders shifted into cautious mode ahead of the Bank of England’s (BOE) interest rate decision later, which is expected to remain on hold. The number of people filing for unemployment benefits in the United States last week will also be released during the day, followed by a speech by Federal Reserve official Mary Daly.
With no important data released at the beginning of the week, speeches by Fed officials provided some clues. On Wednesday, Boston Fed President Susan Collins said it will take longer than previously expected to bring inflation down to its 2% target, stressing that it could remain elevated for longer. interest rate. New York Fed President John Williams and Minneapolis Fed President Neel Kashkari also said they favor keeping interest rates at current levels for longer. These hawkish comments from Fed policymakers provided some support to the US dollar (USD) and gave a boost to GBP/USD.
Last week, the Federal Reserve Board decided to keep interest rates unchanged. Higher-than-expected U.S. inflation data prevented the Federal Reserve from lowering borrowing costs. Financial markets are pricing in two Fed rate cuts this year, down from six in early 2024.
On the other hand, the Bank of England is likely to keep the key interest rate unchanged at 5.25% at its May meeting on Thursday. However, UK inflation maintained its downward trend, fueling speculation that the Bank of England may cut interest rates before the Fed. Investors will get more clues from Bank of England speeches on Thursday from Bailey and Peel. If Bank of England policymakers continue to remain dovish, the pound (BOE) could face further depreciation.
