The British pound declined in European trading on Thursday against a basket of global currencies, extending its losses for the third consecutive day against the US dollar, amid a rebound in the US currency following the release of strong US new jobs data.

Sterling is also pressured by strong expectations that the Bank of England will cut interest rates in March. To reprice those expectations, investors are awaiting important UK economic growth data due later today.

Price Overview

• British pound exchange rate today: The pound fell against the dollar by 0.1% to $1.3616, from the opening level at $1.3629, and recorded a session high at $1.3642.

• The pound lost 0.1% on Wednesday against the dollar, marking its second consecutive daily loss, after the release of strong economic data in the United States.

The US dollar

The dollar index rose on Thursday by 0.1%, within attempts to recover from a two-week low, reflecting improved levels of the US currency against a basket of major and minor currencies.

This rebound comes after the release of strong US labor market data, which reduced the likelihood that the Federal Reserve will cut US interest rates in the near term.

Following the January jobs report and according to the CME FedWatch tool: pricing for keeping US interest rates unchanged at the March meeting rose from 79% to 95%, while pricing for a 25 basis point rate cut fell from 21% to 5%.

UK interest rates

• After the Bank of England meeting last week, traders increased their bets on resuming the monetary policy easing cycle and cutting interest rates.

• Market pricing for the probability that the Bank of England will cut UK interest rates by 25 basis points at the March meeting is currently steady above 60%.

Economic growth

To reprice the above probabilities, investors are waiting later today for UK economic growth data, which is expected to have a strong impact on the Bank of England’s monetary policy path.

At 07:00 GMT, monthly GDP is due, expected to grow by 0.1% in December from 0.3% growth in November. At the same time, the preliminary quarterly GDP reading is expected to show growth of 0.2% in Q4 2025 from 0.1% in Q3.

Expectations for the British pound

We expect here at Economies.com: if UK growth data come in weaker than market expectations, the probability of a Bank of England rate cut in March will rise, leading to further losses in the British pound.

The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, extending its gains for the fourth consecutive day against the US dollar and recording its highest level in two weeks, amid a strong wave of buying driven by easing financial concerns in Japan.

In addition to the shift in focus from spending to growth, traders are betting that the landslide parliamentary election victory of Prime Minister Sanai Takaichi puts her in a strong position to pursue more fiscally responsible policies and gives her greater ability to control downside risks in government bonds.

Price Overview

• Japanese yen exchange rate today: The dollar declined against the yen by 0.6% to ¥152.22, the lowest level since January 28, from today’s opening level at ¥153.22, and recorded a session high at ¥153.44.

• The yen ended Wednesday’s trading higher by about 0.75% against the dollar, marking its third straight daily gain, amid a strong buying wave after the landslide parliamentary election victory of the Liberal Democratic Party led by Prime Minister Sanai Takaichi.

Financial concerns

Takaichi’s landslide victory gave investors greater confidence in her ability to push growth-supportive fiscal policies and ease cost-of-living pressures, while at the same time placing her in a position to use stimulus tools more responsibly.

There is little doubt that Takaichi’s expected adoption of more coherent economic policies will reduce financial concerns and strengthen confidence in the overall economic path, and that stimulus measures will support deficit control and contain public debt growth.

Expectations for the Japanese yen

• Naka Matsuzawa, chief strategist at Nomura Securities in Tokyo, said: “These are purchases by Japanese investors,” as the yen — not the euro — has become the preferred choice for investment outside the United States.

• Yosuke Miyairi, FX and rates strategist at Nomura, said the dollar/yen exchange rate could follow the narrowing interest rate differentials between the United States and Japan and fall toward 150 if investors see Takaichi becoming more fiscally responsible.

Japanese interest rates

• Market pricing for the probability that the Bank of Japan will raise interest rates by a quarter percentage point at the March meeting is currently steady below 10%.

• In order to reprice those probabilities, investors are awaiting further data on inflation, unemployment, and wages in Japan.

Nickel prices rose for the fourth consecutive session on Wednesday after the world’s largest nickel mine in Indonesia received a much lower production quota for this year, increasing supply concerns.

The three-month benchmark nickel contract on the London Metal Exchange climbed 2.1% to $17,860 per metric ton by 10:00 GMT, after touching an earlier gain of 2.8% at $17,980, its highest level since January 30.

French miner Eramet said its PT Weda Bay Nickel project, a joint venture with China’s Tsingshan and Indonesia’s PT Antam, received an initial production quota of 12 million wet metric tons for 2026, down from 32 million wet metric tons in 2025, adding that it will apply for an upward revision of the quota.

After a prolonged period of low prices, nickel has jumped about 18.6% over the past three months and hit its highest level in more than three years on January 25, after Indonesia — the world’s largest producer of nickel ore — pledged to curb supplies.

Nitesh Shah, commodities strategist at WisdomTree, said Indonesia clearly recognizes its pricing power, noting that its control of about 60% of global output makes it more influential than OPEC in the oil market. He added that Jakarta has realized it does not need to overproduce to achieve solid revenues.

Even so, the International Nickel Study Group expects a surplus of 261,000 tons this year, while an LME futures positioning report showed that one party holds a short position in the February contract equal to between 20% and 29% of total open interest.

Other base metals were also supported by the weaker US dollar, which makes dollar-denominated commodities more attractive to holders of other currencies.

Copper rose 1.2% to $13,266.50 per ton as top consumer China prepares for the Lunar New Year holiday. Aluminum gained 1.1% to $3,127.50, zinc added 1.4% to $3,442.50, lead rose 0.6% to $1,985, and tin jumped 2.8% to $50,700 per ton.

Bitcoin fell below the $67,000 level during Asian trading on Wednesday, as investors awaited key US jobs data due later in the day, which could influence the Federal Reserve’s interest rate path.

The world’s largest cryptocurrency was trading down about 2.6% at $67,126.7 as of 02:46 ET (07:46 GMT).

Ongoing market volatility

Bitcoin recently recovered from last week’s drop near the $60,000 level, but struggled to hold gains above $70,000, reflecting continued volatility and weak sentiment across digital asset markets.

Delayed jobs data in focus

The delayed US employment report — originally scheduled for last week before being postponed due to a short government shutdown — is set for release later on Wednesday.

Economists expect the report to show that about 70,000 jobs were added in January, with the unemployment rate holding near 4.4%.

Inflation data also in focus

Traders are also watching for the Consumer Price Index (CPI) report due on Friday, which may help shape inflation expectations and, in turn, influence Fed interest rate decisions.

According to the CME FedWatch tool, markets currently expect the Federal Reserve to keep rates unchanged until June, following three consecutive rate cuts in late 2025.

Rate impact on risk assets

Expectations of monetary easing and lower interest rates typically support higher-risk assets, including Bitcoin, as the opportunity cost of holding non-yielding assets declines.

However, the current cycle appears different, with Bitcoin prices remaining relatively weak despite rate cuts, amid reduced liquidity, softer institutional demand, and fading speculative flows, according to analysts.

Robinhood shares fall on weaker crypto revenue

Shares of Robinhood Markets fell in after-hours trading on Tuesday after the digital brokerage reported quarterly results below expectations, pressured by weaker cryptocurrency trading revenue and slower overall digital asset activity.

The company posted fourth-quarter revenue of about $1.28 billion, below analyst expectations of $1.40 billion.

Crypto revenue declined sharply, outweighing growth in stock and options trading, sending the stock down more than 8% in after-hours trading.

Altcoins decline

Most major altcoins also moved lower on Wednesday amid the cautious market tone.

Ethereum, the second-largest cryptocurrency, fell 2.7% to $1,952.92, while XRP, the third-largest, dropped about 4% to $1.36.