The British pound fell sharply the day before because of worries about government finances and politics. But yesterday, the pound rebounded as traders bought it back.
Recently, Prime Minister Starmer changed his cabinet and moved the Deputy Chief of the Treasury. This increased fears about the government budget, and borrowing costs went up quickly. Because of this, the pound dropped more than 200 points.
Yesterday, Finance Minister Reeves said she will keep financial discipline. This helped the pound recover to 1.3458, which is about 61.8% of the earlier fall.
On the other hand, Bank of England Governor Bailey said there is a growing risk of weakness in the job market. Also, MPC member Taylor said he hopes for 4–5 interest rate cuts per year. These comments about wanting lower interest rates, together with budget and political worries, may cause the pound to fall again after the rebound.
Pound-Dollar expected range: 1.3360 – 1.3480 USD
Note: This information does not guarantee profits. Please make your own decisions when trading.