Daily digest market movers: Pound Sterling weakens against the US Dollar and Australian Dollar
- The Pound Sterling outperforms the majority of its peers except the US Dollar and the Australian Dollar (AUD). The US Dollar rebounds in European trading hours after correcting on Tuesday and the Australian Dollar is upbeat as expectations for rate cuts by the Reserve Bank of Australia (RBA) have been postponed to April 2025 from February of the same year projected earlier.
- The British currency clings to gains as Bank of England (BoE) policymakers worry about stubborn inflation in the United Kingdom (UK) service sector, which has been refraining from leaning towards policy easing. While inflation in other sectors has declined significantly due to weak demand from domestic and overseas markets.
- Due to the absence of top-tier economic data this week, investors will majorly focus on headlines relating to the UK elections, which kick off on Thursday. The UK Prime Minister Rishi Sunak-led Conservative Party is expected to suffer a defeat from the opposition Labor Party.
- New government formation is expected to deliver expansionary fiscal policies, which could boost price pressures and force the BoE to maintain a restrictive stance on interest rates for a longer period than previously expected.
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