POUND STERLING TRADES SIDEWAYS AS INVESTORS SEEK FRESH GUIDANCE OVER BOE INTEREST RATES

• The Pound Sterling trades back and forth as investors await a fresh trigger.
• The UK economy returns to growth after contracting in the second half of 2023.
• Market sentiment remains calm ahead of US data.

The Pound Sterling (GBP) is stuck in a tight range around 1.2800 in Thursday’s London session as investors seek fresh guidance on the Bank of England’s (BoE) next moves in terms of interest rates. The GBP/USD pair trades sideways as investors look for clues about when the BoE and the Federal Reserve (Fed) will start reducing interest rates.

The near-term appeal of the Cable is uncertain as the stubborn United States inflation data for February has reinforced fears that the Fed could delay plans to reduce interest rates. Currently, markets broadly expect that the Fed will make this move in June.  

Meanwhile, the US Dollar Index (DXY) rebounds to 102.90 ahead of the US Producer Price Index (PPI) and Retail Sales data for February, which will be published at 12:30 GMT. These indicators could provide fresh cues about the Fed’s rate-cut timing for this year.