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GBP: Pound slumps after soft UK CPI – Scotiabank
Key Takeaways (30s Read)
Pound Sterling plummeted after soft UK CPI reinforced expectations of a Bank of England rate cut.
The Pound Sterling (GBP) sharply weakened against the US Dollar (USD) following softer-than-expected UK CPI data. According to Scotiabank's Chief FX Strategists, Shaun Osborne and Eric Theoret, this weaker inflation reading reinforced expectations of a Bank of England (BoE) rate cut and a more dovish policy outlook into 2026. The slowdown in inflation heightens concerns about the UK's economic recovery, prompting further drops in GBP as market participants anticipate possible action from the BoE, which could significantly influence trading decisions moving forward.
AI Analyst
AI Opinion
"The sharp decline in the Pound reflects market expectations regarding UK monetary policy. The soft CPI suggests that the Bank of England may lean towards a more dovish stance, which triggers a risk-off sentiment among investors. GBP is currently testing crucial support levels, and upcoming economic indicators and BoE policy announcements will significantly impact its movement. As volatility in currency markets increases, traders should exercise caution, particularly when positioning against the USD."
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