GBP stuck at 5 month lows against the US Dollar

On Tuesday, Sterling remained at a five-month low against the dollar following reports indicating that Britain's unemployment rate climbed higher than anticipated.

The pound remained static after the data release against the dollar at $1.24475, after hitting its lowest level since November 17 earlier in the session. It also maintained stability against the euro, with the euro-pound exchange rate standing at 85.36 pence.

In the three months leading to February, the UK unemployment rate increased to 4.2% from 3.9%. However, the Office for National Statistics noted that there was still some volatility in its data due to the ongoing overhaul of its survey, which generates the figure.

Regular wages, excluding bonuses, expanded by 6.0% compared to the same period a year ago, marking a slight decrease from the 6.1% growth observed in the November-to-January period.

Investors will closely watch inflation data due on Wednesday for insights into the trajectory of the BoE's rate cuts, with market expectations favoring August as the probable start date for policy easing.

Money markets are currently anticipating approximately 46 basis points of interest rate cuts by the BoE this year. The likelihood of a first cut in August is considered more probable than not, although it is not fully priced in.

Last week's U.S. inflation figure, which surpassed expectations, has prompted markets to further reduce their expectations of the first Federal Reserve rate cut. As a result, the anticipated timing for the first rate cut has shifted from June to September.

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