The British pound sterling remains in a sideways range against the US dollar. The current quote in GBPUSD is 1.2698.
While the pound maintains its balance against the USD, it has reached a four-month high against the EUR. This was influenced by the fact that the British economy appears as stable as before, and the Bank of England will decide on rate cuts later than anyone else.
Yesterday's published statistics showed that the UK budget deficit in December was below expectations. Theoretically, this allows for a reduction in tax rates in the new budget, which will come into effect in March.
The main question for GBP is how far the Bank of England will lag behind the Federal Reserve and the ECB regarding easing monetary policy.
The average stock market expectations reflect a 50% probability of a BoE interest rate cut in May, which may be too early for the regulator still concerned about high inflation in the country.