Posted By Global Banking and Finance Review
Posted on January 15, 2025
By Alun John
LONDON (Reuters) -The pound held steady on both the dollar and euro on Wednesday as the relief investors felt from a cooler-than-expected inflation print that sparked a rally in gilts outweighed the traditional relationship between the currency and yields.
The pound was choppy, but was last around flat on the day at $1.2209 as investors digested data that showed British inflation unexpectedly slowed last month to 2.5% year on year.
That was broadly where the currency was before the numbers were released.
Core measures of growth, tracked closely by the Bank of England, fell more sharply and as a result, traders increased bets on another BoE rate cut in February.
They now see around an 80% change of a 25-basis point easing, up from around 60% before the data, a shift which supported under-fire British government bonds known as gilts.
The British benchmark…
