UK Nationwide house prices (non-seasonally adjusted) rose by 3% year on year in April.

This was above the forecast of 2.2%.

Implications For Bank Of England Policy

The stronger-than-expected 3% rise in UK housing prices signals resilience in the economy, which will catch the Bank of England’s attention. This data makes near-term interest rate cuts less likely as policymakers will be concerned about reigniting inflation. We must now adjust our expectations for a more hawkish stance from the central bank in its upcoming meetings.

This housing data is not happening in a vacuum; the most recent UK CPI inflation reading for March also remained firm at 2.8%, staying stubbornly above the 2% target. Further supporting this, the latest Bank of England statistics showed mortgage approvals climbing to a two-year high of 65,000. These figures collectively suggest that underlying demand in the economy is robust.

In response, we see an opportunity in short-term interest rate (STIR) futures. The market will likely start pricing out at least one of the rate cuts previously anticipated for late 2026. We should therefore consider selling Sterling Overnight Index Average (SONIA) futures, as their prices will fall if rate expectations move higher.

This shift in rate expectations should also make the pound sterling more attractive, especially against currencies where the central bank outlook is more dovish. We see value in looking at call options on GBP, particularly against the euro, to position for a potential appreciation of the pound over the next several weeks. This allows for upside exposure to a strengthening sterling while clearly defining the risk.

Looking back from our perspective in 2025, we all remember the high inflation of 2022-2023 and the aggressive rate hikes that followed. The Bank of England will be wary of making the same mistake of waiting too long to address inflationary pressures. This recent history strongly suggests they will err on the side of keeping policy tighter for longer.

Market Positioning And Trade Expression

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GBP/USD held near 1.3610 in Asian trading on Friday, after rising nearly 1% the day before. The US Dollar firmed on safe-haven demand linked to the ongoing Middle East conflict.

US President Donald Trump said the naval blockade of Iranian ports would continue, while concerns remained that the Strait of Hormuz may not reopen soon. He also criticised efforts in Congress to limit his war powers, including a Senate proposal that was rejected on Thursday.

Gbpusd Rebounds But Faces Key Resistance

On Thursday, GBP/USD rose 0.96% and finished near 1.3600 after testing about 1.3455 earlier in Europe. The session produced a long lower wick on the daily candle, with price stalling near the 1.3600 level later on.

The Bank of England kept the Bank Rate at 3.75% by an 8-1 vote, with Huw Pill calling for a 25 basis point rise. In the US, March PCE inflation was 3.5% year on year, and preliminary Q1 GDP growth was 2% versus a 2.3% consensus.

GBP/USD was up about 0.78% on Thursday and was last noted at 1.3581, with a bullish engulfing pattern in view. The pair cleared resistance around 1.3560/65, while the RSI moved above 60.

We are looking at a very different picture today, May 1, 2026, compared to the bullish sentiment for GBP/USD back in 2025. The pair was trading around 1.3600 then, buoyed by a hawkish Bank of England that held its rate at 3.75%. Today, we see the pound struggling near 1.2550 as the economic landscape has completely shifted.

The Bank of England’s hawkish stance from 2025 has fully reversed as inflationary pressures have eased significantly. UK CPI for March 2026 came in at just 2.1%, allowing the Monetary Policy Committee to cut the Bank Rate to its current 2.50%. This policy divergence makes holding sterling far less attractive than it was previously.

Markets Refocus On Rates And Growth

In contrast, the US economy has shown continued resilience, with the latest Non-Farm Payrolls report for April 2026 adding a solid 210,000 jobs. With US core inflation proving sticky at 2.8%, the Federal Reserve is holding its key rate firm at 3.00%. This interest rate differential of 0.50% in favor of the dollar is a primary driver for the pair’s downward trend.

The safe-haven demand for the US Dollar driven by Middle East tensions in 2025 has also receded from the headlines. While geopolitical risks are ever-present, the market’s focus has shifted decisively back to these clear economic fundamentals. This makes the contrast in monetary policy between the US and the UK the main story for traders.

Given this environment, we see opportunities in positioning for further sterling weakness in the coming weeks. Options traders could consider buying GBP/USD puts to speculate on a move lower toward the 1.2400 support level. Selling out-of-the-money call options offers another strategy to collect premium with a bearish-to-neutral view on the pair.

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Gold prices in Saudi Arabia fell on Friday, based on FXStreet data. Gold was priced at SAR 556.34 per gram, down from SAR 557.35 on Thursday.

Gold also slipped to SAR 6,489.03 per tola from SAR 6,500.84 a day earlier. Other listed rates were SAR 5,563.38 for 10 grams and SAR 17,304.03 per troy ounce.

How FXStreet Calculates Local Gold Prices

FXStreet converts international prices into Saudi riyals using the USD/SAR rate and local units. The figures are updated daily using market rates at the time of publication, and local prices may vary slightly.

Gold has long been used as a store of value and a medium of exchange. It is also used in jewellery and is often bought during market stress, as well as to protect against inflation and currency weakness.

Central banks hold the most gold. World Gold Council data shows central banks added 1,136 tonnes worth about $70 billion in 2022, the highest annual total on record.

Gold often moves opposite to the US Dollar and US Treasuries. It can also move opposite to risk assets, and it tends to rise when interest rates fall and the Dollar weakens.

Interest Rates And Central Bank Demand

That small dip in the gold price is likely just daily noise. We see the broader environment as supportive, with expectations for lower interest rates creating a headwind for the US Dollar. A weaker dollar generally makes gold, which is priced in dollars, more attractive.

The key factor is the outlook for interest rates, as gold is a zero-yield asset. The futures market is now pricing in a greater than 75% probability of a US Federal Reserve rate cut by September 2026. This potential shift makes holding non-interest-bearing gold more appealing compared to bonds.

We also need to consider the immense demand from central banks, which provides a strong floor for prices. Looking back, we saw them add over 1,000 tonnes to their reserves in 2025, continuing the record-breaking pace from the preceding years. This consistent buying from major players like China and India is a powerful bullish signal.

For derivative traders, this suggests positioning for a potential rise in the coming weeks. We believe buying call options on XAU/USD is a direct way to capitalize on this outlook, especially if upcoming inflation data continues to show a cooling trend. Traders should watch implied volatility levels to find attractive entry points for these positions.

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Gold prices in the Philippines fell on Friday, based on FXStreet data. Gold was priced at PHP 9,091.70 per gram, down from PHP 9,109.28 on Thursday.

Gold also slipped to PHP 106,045.50 per tola from PHP 106,248.80 the previous day. Other listed prices were PHP 90,918.45 for 10 grams and PHP 282,782.00 per troy ounce.

How Gold Prices Are Converted

FXStreet converts international gold prices into Philippine pesos using the USD/PHP exchange rate and local units. Prices are updated daily using market rates at the time of publication, and local levels may differ slightly.

Central banks held the largest gold reserves and added 1,136 tonnes worth about $70 billion in 2022, according to the World Gold Council. This was the highest annual purchase since records began, with China, India and Turkey among emerging economies increasing reserves.

Gold often moves opposite to the US Dollar and US Treasuries, and it can also move against risk assets. Price drivers include geopolitical events, recession concerns, interest rates, and shifts in the US Dollar because gold is priced in dollars (XAU/USD).

We are seeing a slight dip in gold prices today, May 1, 2026, which appears to be minor profit-taking rather than a significant trend reversal. This small pullback follows the strong rally gold experienced in the first quarter of the year. Traders should consider this a potential entry point, not a signal of fundamental weakness in the market.

Market Outlook And Trading Considerations

The primary factor supporting gold is the US Federal Reserve’s recent language suggesting a pause to the aggressive rate-hiking cycle that defined 2025. With US inflation data from April 2026 showing it remains stubbornly above 3.5%, the market anticipates a weaker dollar in the coming months. A weaker dollar is historically positive for gold prices, as the metal is priced in USD.

We have also seen continuous and strong demand from central banks, which creates a solid price floor. Official reports confirmed that central banks globally added over 1,050 tonnes to their reserves in 2025, nearly matching the record-breaking pace we saw earlier in the decade. This persistent buying signals a global strategic diversification away from the US dollar.

For derivative traders, this environment suggests that buying call options on gold for the upcoming weeks could be a sound strategy. The current small price dip has likely reduced implied volatility, making options contracts more affordable. This allows for capturing potential upside gains with a clearly defined risk, especially with ongoing geopolitical tensions in key shipping lanes.

Looking back, we should recall the sharp, temporary price correction during the third quarter of 2025, which was driven by unexpected strength in the US jobs report. This reminds us that while the overall trend for gold appears positive, leveraged positions must be managed carefully. Using options to limit potential losses remains a more prudent approach than holding outright futures contracts.

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USD/JPY extended a late rebound from the mid-155.00s and rose during Friday’s Asian session. It reached about 157.55, but buying interest stayed limited after the bounce.

The yen weakened after softer Tokyo consumer inflation data, which may allow the Bank of Japan to pause amid economic concerns linked to Middle East tensions. A modest rise in the US dollar also supported the pair.

Intervention Risk Stays In Focus

Japan’s top foreign exchange diplomat, Atsushi Mimura, said officials are in close contact with the US on currency. This kept intervention risk in focus and limited further yen losses.

On Thursday, USD/JPY dropped from 160.75, the highest level since July 2024, and found support near the 61.8% Fibonacci retracement of the February–April rise. The pair has also held above the 200-day EMA.

Momentum signals still point lower, with RSI near 40 and MACD below zero. Resistance is seen at 157.48, then 158.73 and 160.75.

Support sits at 156.47, then 155.47 and the 200-day EMA at 155.21. Below that, levels include 154.03 and 152.20.

Outlook From May 1 2026

The technical section was produced with help from an AI tool.

As of today, May 1, 2026, we are seeing the USD/JPY hold above the 157.00 level, but the path forward is clouded by conflicting forces. The fundamental weakness in the Yen is running directly into strong verbal warnings from Japanese officials, creating a tense standoff. This suggests that instead of betting on direction, traders should prepare for a sharp, sudden move.

The case for a weaker Yen remains intact, as the latest Tokyo Core CPI data for April 2026 came in at 1.9%, just below the Bank of Japan’s target. This gives the BoJ every reason to delay further interest rate hikes, keeping its policy accommodative. This policy could push the pair to test resistance levels from last year, such as the 158.73 mark.

However, the risk of government intervention is extremely high and should not be underestimated. We remember the significant yen-buying operations in October 2024 and again in March 2025, which occurred as the pair moved past 161. Finance Minister Suzuki’s comments just two days ago that he is watching markets with a “high sense of urgency” make the threat of a repeat intervention very credible, effectively capping the upside near the old 160.75 high.

On the other side of the pair, the US dollar remains supported by a Federal Reserve concerned about persistent inflation, with the latest Core PCE Price Index holding stubbornly at 2.9%. This policy divergence between a hawkish Fed and a dovish BoJ provides a strong floor under the pair. This prevents a currency collapse unless the Ministry of Finance decides to act forcefully.

Given this backdrop, implied volatility is the main factor to watch, with one-month options pricing now reflecting a potential for explosive movement. Strategies like buying straddles or strangles could be effective, as they profit from a large price swing in either direction, whether from a breakout or a surprise intervention. A clean break below the critical 155.20-155.50 support zone would be the signal that intervention is underway and that the short-term trend has reversed.

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Gold prices in the United Arab Emirates fell on Friday, based on FXStreet data. Gold was priced at AED 544.87 per gram, down from AED 545.87 on Thursday.

The price per tola dropped to AED 6,355.23 from AED 6,366.94 a day earlier. Other listed prices were AED 5,448.68 for 10 grams and AED 16,946.79 per troy ounce.

Uae Gold Price Snapshot

FXStreet converts international gold prices into UAE dirhams using the USD/AED exchange rate and local measurement units. The figures are updated daily using market rates at the time of publication, and local prices may differ slightly.

Central banks are the largest holders of gold. According to the World Gold Council, central banks added 1,136 tonnes of gold worth about $70 billion to reserves in 2022, the highest annual total on record.

Gold often moves inversely to the US Dollar and US Treasuries, and it can also move against risk assets such as equities. Price drivers include geopolitical events, recession concerns, interest rates, and US Dollar movements, as gold is priced in dollars (XAU/USD).

The slight dip in gold prices is just noise against a much larger background of supportive factors. The coming weeks will likely be defined by expectations around US interest rate policy and continued strong demand from central banks. This environment suggests volatility, which presents opportunities for derivative traders.

Key Market Drivers Ahead

We have seen the Federal Reserve hold interest rates steady since its last hike back in 2024, with the Fed funds rate sitting near 5.50%. Now, the market’s entire focus is on the timing and pace of future rate cuts to support a slowing economy. This anticipation of lower rates is fundamentally bullish for gold, as it lowers the opportunity cost of holding the non-yielding metal.

This outlook has also put pressure on the US dollar, which we have seen ease off its 2025 highs. The Dollar Index (DXY) has been trading in a range around 102, a significant shift from the stronger levels seen during the peak of the rate-hiking cycle. A weaker dollar generally provides a strong tailwind for gold prices.

Underpinning the market is the relentless purchasing by central banks, a trend that accelerated through 2025. Following record purchases in previous years, the World Gold Council confirmed that central banks collectively added another 1,050 tonnes to their reserves last year. This consistent demand, particularly from emerging economies, creates a solid floor under the price and signals that major dips will likely be bought.

Given the persistent geopolitical tensions that have carried over from the last few years, gold’s role as a safe-haven asset remains critical. Any escalation in global conflicts or unexpected political instability could trigger sharp upward moves. This makes holding some form of bullish gold exposure a prudent hedge.

For traders, this suggests that buying call options or establishing bull call spreads could be an effective strategy to capitalize on potential upside while defining risk. Selling cash-secured puts on significant price drops could also be considered, taking advantage of the volatility and the strong underlying support from central bank buying. The market appears poised for upward movement, but the path will likely be choppy.

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GBP/JPY rose 0.35% to about 214.00 in Asian trading on Friday. It moved up as the Japanese Yen gave back most of its gains from Thursday after Japan acted in forex markets to counter one-way speculative moves.

Reuters reported that Japan supported the Yen against the US Dollar on Thursday. It was the first official currency action in nearly two years, and Finance Minister Satsuki Katayama said Japan is moving closer to decisive action in the forex markets.

Tokyo Inflation Cools Further

Tokyo’s CPI excluding fresh food for April was weaker than expected. Inflation eased to 1.5% year-on-year from 1.7% in March, versus a forecast of 1.8%.

The Pound traded higher against most major peers in Asian trade, except the Canadian Dollar. This followed comments that the Bank of England could raise rates if the energy supply shock continues.

On Thursday, the Bank of England kept rates at 3.75%. Governor Andrew Bailey said the Bank would act early rather than wait for second-round effects from energy-related inflation.

We are seeing the classic fade of a currency intervention, with GBP/JPY now pushing 214.00. The yen’s rebound was short-lived because Japan’s actions are not supported by their central bank’s monetary policy. This pattern is familiar to us from the large-scale, and ultimately temporary, interventions we witnessed back in 2022.

Policy Divergence Drives Volatility

The core problem for the yen is Japan’s own weak inflation, with the latest Tokyo CPI data for April unexpectedly cooling to 1.5%. This makes it nearly impossible for the Bank of Japan to consider raising interest rates meaningfully, even after they finally ended their negative interest rate policy in March 2024. The Ministry of Finance is therefore fighting the market with one hand tied behind its back.

In contrast, the Bank of England’s signal is clear and reinforces the pound’s strength. With UK inflation reported at 3.2% in March 2024 and still stubbornly above the 2% target, Governor Bailey’s hints at further rate hikes are very credible. This widens the already massive interest rate gap between the UK and Japan, making it profitable to hold pounds and sell yen.

For derivative traders, this conflict between intervention threats and fundamental policy divergence is a recipe for high volatility. We should anticipate sharp, sudden moves in GBP/JPY, making this an ideal environment to buy options strategies like straddles to profit from the size of the moves, not just the direction. The VIX index, a measure of expected market volatility, has already shown sensitivity to central bank actions throughout 2025, and we expect currency volatility to follow.

Despite the expected choppiness, the underlying trend remains upward for GBP/JPY. The powerful carry trade, where traders profit from the interest rate differential, will continue to attract capital into the pound. We should therefore view any yen strength caused by further Japanese intervention as a temporary discount and a strategic opportunity to enter long positions.

Looking back, Japan spent a record 9.79 trillion yen in late 2022 trying to prop up its currency, but the effect did not last. The market’s focus will always return to the interest rate fundamentals, which strongly favor a higher GBP/JPY. Selling out-of-the-money put options on GBP/JPY could be an effective way to collect premium while positioning for this continued upward drift.

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EUR/JPY traded near 184.40–184.50 in Asian hours on Friday, after a 1.88% fall the previous day. The move came as the Japanese yen weakened after mixed Tokyo inflation figures.

Tokyo’s headline CPI rose 1.5% year-on-year in April, up from 1.4%. Core CPI excluding fresh food rose 1.5% year-on-year, below the 1.8% forecast and down from 1.7%, while CPI excluding fresh food and energy eased to 1.5% from 1.7%.

Tokyo Inflation And Yen Reaction

The yen had earlier found support after a sharp move that was widely linked to possible action by Japanese authorities. The Finance Ministry has not confirmed any operation, and traders are assessing the likelihood of further rounds.

Vice Finance Minister for International Affairs Atsushi Mimura did not comment on intervention or crude oil futures. He said Japan remains in close contact with the US on currency issues.

The euro also had support after the ECB kept interest rates unchanged at its April meeting, with the deposit rate held at 2%. The ECB said the outlook is broadly unchanged, while upside risks to inflation and downside risks to growth have increased.

Looking back to this time last year, in April 2025, we saw the market grapple with mixed signals from Japan. The weak core inflation figures suggested the Bank of Japan had little reason to raise interest rates, which kept the Yen under pressure. This fundamental weakness was, however, briefly interrupted by suspected government intervention to prop up the currency.

Options Volatility And Intervention Risk

The interventions we saw last year created massive, short-term volatility but did not change the Yen’s long-term downward trend. We can see a similar pattern to the interventions of 2022 and 2024, where trillions of Yen were spent for only temporary relief. For derivative traders, this means that while the underlying trend for a weaker Yen remains, the risk of sudden, sharp reversals is very high, causing implied volatility on EUR/JPY options to spike above 12% during those periods.

The policy gap between Europe and Japan has only widened since the ECB’s cautious stance in April 2025. Persistently sticky Eurozone inflation, which is currently running at 2.8%, has forced the ECB to maintain its deposit rate at 2.25%. In contrast, the Bank of Japan has only nudged its own rate to 0.1%, creating a significant interest rate differential that continues to favor the Euro.

This environment suggests that traders could consider buying call options on EUR/JPY to profit from the expected continued rise, but with a defined, limited risk if another intervention occurs. Selling out-of-the-money put options could also be a viable strategy to collect premium, capitalizing on the high implied volatility and the belief that any Yen strengthening will be short-lived. However, this strategy carries significant risk if an intervention is larger than expected.

The central conflict for the market remains the Bank of Japan’s passive monetary policy versus the Finance Ministry’s active currency intervention. This tension is the primary reason for the elevated volatility we are seeing. Traders should therefore focus on strategies that can profit from both the underlying upward trend in EUR/JPY and the periods of extreme price swings.

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EUR/USD held onto Thursday’s gains near 1.1735 in Asian trading on Friday, as the US Dollar stayed weak after suspected Japanese intervention in forex markets. The US Dollar Index traded near its Thursday low around 98.00.

US preliminary Q1 GDP growth was 2% annualised, below the 2.3% forecast. Markets awaited the US ISM Manufacturing PMI for April at 14:00 GMT, expected at 53.0 versus 52.7 previously.

Euro Holds Firm Ahead Of Ecb Signals

The euro traded broadly firm as traders awaited comments from European Central Bank officials after the post-decision quiet period. EUR/USD remained above the 20-period EMA at 1.1702 and hovered just below the 50.0% Fibonacci retracement at 1.1745, with RSI near 55.

Resistance levels were cited at 1.1745, then 1.1825, with further levels at 1.1938 and 1.2082. Support levels were noted at 1.1702 and 1.1666, then 1.1567, with the cycle low near 1.1408.

The report stated that its technical analysis used an AI tool.

Looking back at this time in 2025, we saw the EUR/USD holding firm near 1.1730 on the back of a weaker dollar. Today, the situation is reversed, with the pair trading much lower around 1.0720. The primary difference is the strength in the US Dollar Index, which now trades near 106, compared to the 98 level it held a year ago.

Policy Divergence Drives A New Price Regime

The economic data tells a similar story of divergence from the past. In 2025, a US Q1 GDP of 2% was seen as a modest disappointment against a 2.3% estimate. This year, the preliminary Q1 2026 data showed a more pronounced slowdown at 1.8%, while the latest April ISM Manufacturing PMI just printed at 49.5, signaling contraction rather than the healthy expansion expected in 2025.

A year ago, we were waiting for ECB commentary, but now we are witnessing clear policy divergence between central banks. We have seen the European Central Bank signal a more dovish stance and even deliver a rate cut, while the Federal Reserve remains cautious due to inflation. This fundamental gap continues to put downward pressure on the Euro.

Interestingly, suspected intervention by Japan to support the yen was a factor causing dollar weakness in 2025. We have seen similar reports of intervention in the past week, but its effect on the broader dollar strength has been much more temporary this time around. The market appears more focused on the underlying interest rate differentials.

Given this context, we believe traders should adjust their strategies for continued euro weakness or range-bound activity at these lower levels. Buying EUR/USD put options or establishing bear put spreads can offer a defined-risk way to position for a potential slide towards the 1.0600 handle. With central bank policy as the main driver, selling out-of-the-money call options to collect premium could also be an effective strategy if the pair fails to break significant resistance.

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GBP/USD traded near 1.3610 in Asian hours on Friday after rising nearly 1% the previous day. The pair was steady as the US Dollar strengthened on safe-haven demand linked to the Middle East conflict.

On Thursday, Bloomberg reported that US President Donald Trump said he would continue a naval blockade of Iranian ports. The report also cited concerns that the Strait of Hormuz may not reopen soon, and noted Trump criticised congressional efforts to limit his war powers, including a Senate proposal rejected that day.

Us Inflation Data In Focus

US data on Thursday showed the PCE Price Index rose to 3.5% year-on-year in March from 2.8% in February, matching expectations. It increased 0.7% on the month, while core PCE rose 3.2% year-on-year after 3% in February, also in line with forecasts.

Preliminary annualised US GDP expanded 2.0% in Q1 2026 versus a 2.3% expectation, up from 0.5% previously. In the UK, the Bank of England kept Bank Rate at 3.75% in an 8-1 vote, with Huw Pill seeking a 25 basis-point rise.

Governor Andrew Bailey referred to second-round inflation risks and potential wage effects from energy-driven price pressures. He said the MPC could act pre-emptively if those pressures feed through.

Given the divergence between central banks, we should prepare for increased volatility in GBP/USD. The Federal Reserve is facing persistent inflation, while the Bank of England just held rates, creating uncertainty about the future path of interest rates. Options strategies that profit from large price swings, such as long straddles, could be advantageous over the next few weeks.

Market Volatility And Policy Divergence

The ongoing conflict in the Middle East is a significant factor driving safe-haven demand for the US dollar. We saw a similar pattern during the Red Sea shipping attacks in late 2023, which caused Brent crude oil prices to jump nearly 10% in a month. This environment suggests that any strength in the pound may be temporary, making bearish positions on GBP/USD via futures or put options a compelling consideration.

The clear split in policy is a core theme for us to trade. With US Core PCE inflation stubbornly high at 3.2%, the Fed may be forced to maintain its hawkish stance, while the BoE’s 8-1 vote to hold rates shows a committee hesitant to act. This is reminiscent of the policy divergence in 2022 when the Fed’s aggressive hikes sent the US Dollar Index (DXY) to a 20-year high, and we could see a similar trend developing now.

The Bank of England’s inaction, despite Governor Bailey’s warnings about second-round inflation effects, signals a key risk for the pound. By choosing to wait, the MPC may find itself behind the curve if energy prices continue to rise, potentially forcing more aggressive hikes later that could damage the economy. This backdrop reinforces a fundamentally weaker outlook for sterling, making it prudent to consider downside protection or speculative short positions.

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