• The Pound Sterling recovers further to 1.2550 amid an improved market mood and a decline in the US Dollar.
• The BoE is expected to start reducing interest rates from the September meeting.
• Investors should brace for high volatility ahead of US NFP at 12:30 GMT.

The Pound Sterling (GBP) rises to 1.2550 against the US Dollar (USD) in Friday’s London session. The GBP/USD pair strengthens as financial markets see the Bank of England (BoE) reducing interest rates from the September meeting, more or less in line with expectations of the US Federal Reserve making a similar move. Earlier, investors were divided between the June or August meeting.

The speculation about the BoE pivoting to interest rate cuts has been postponed as investors remain worried about strong wage growth in the United Kingdom, which is feeding the core Consumer Price Index (CPI), the central bank’s preferred inflation measure.

For the headline inflation, BoE Governor Andrew Bailey said he is confident that it will return to the desired rate of 2%. The next BoE’s monetary policy decisionich will be announced on May 9, and markets expect the bank to hold interest rates steady at 5.25%. Investors will keenly focus on whether Andrew Bailey sticks to its statement that expectations for two or three rate cuts are reasonable this year, as stated in March’s policy meeting