The Swiss National Bank cut interest rates by 25 basis points today to 0.25%, the lowest since June 2022 as expected by market analysts, and after a similar cut at the December meeting. 

Sterling fell in European trade on Thursday against major rivals, giving up four-month high against the dollar and on track for the first loss in four days on profit-taking following weak UK labor data.

The decline comes amid risk aversion before the Bank of England's policy decision today, expected to maintain interest rates unchanged.

The Price

The GBP/USD pair fell 0.3% today to $1.2963, with November 2024 highs at $1.3015.

The pound rose 0.1% on Wednesday against the greenback, marking the third profit in a row as US yields declined. 

UK Labor Data

UK unemployment for three months ending January steadied at 4.4% as expected, same as the previous reading.

UK average wages for the three months ending January rose 5.8% as expected, below 6.1% in the previous reading.

The data showcases softness in the labor market, which bolsters the odds of a May interest rate cut by the Bank of England.

UK Rates

Following the data, the odds of a BOE interest rate cut in March stood at just 1%, with a higher than 50% chance of a rate cut in May.

BOE

Later today, the Bank of Japan is expected to announce its policy decision, likely to maintain interest rates flat at 4.5%, the lowest since May 2023.

BOE Governor Andrew Bailey will speak later on the future of inflation and interest rates and the UK economic outlook.

UK average wages for the three months ending January rose 5.8% as expected, below 6.1% in the previous reading. 

UK jobless claims surged 44.2 thousand in February, the worst reading since July 2024, and widely missing estimates of a 7.9 thousand increase, and compared to January's 22.0 thousand increase.