The pound (GBP) traded subdued against the other major currencies on Wednesday (12/3) as investors looked for fresh cues on next week's Bank of England (BoE) monetary policy meeting. Traders are confident that the BoE will keep interest rates unchanged at 4.5% as a number of officials have been guiding a ‘gradual and cautious' approach to monetary easing.

Last week, four BoE policymakers, including Governor Andrew Bailey, guided for a gradual path to "unwinding monetary policy restraint" as persistent inflation is unlikely to fade "on its own". Contrary to them, BoE member Catherine Mann supported a rapid policy easing approach due to "substantial volatility" coming from financial markets, especially from "cross-border spillovers".

This week, investors will focus on the UK's (UK) monthly Gross Domestic Product (GDP) and Industrial and Manufacturing Production data for January, due on Friday. The UK economy is expected to grow at a modest pace of 0.1%, compared with a 0.4% expansion seen in December. Monthly factory data is expected to decline in the first month of 2025. (Newsmaker23)

Source: FXstreet