Sterling Drops as Bank of England Signals Rate Cuts

European stocks opened mixed, with the FTSE declining while Paris and Frankfurt saw gains ahead of the U.S. non-farm payrolls report, which is expected to show unemployment steady at 4.2% and average hourly earnings at 3.8% year-on-year. The British pound dropped sharply, facing its largest daily decline in almost two years following Bank of England Governor Andrew Bailey's suggestion of potential interest rate cuts, causing investors to shift to safer currencies. In response to Middle East tensions and a strong U.S. job market, the dollar reached a one-month high, further pressuring the pound. Oil prices spiked, with Brent reaching its highest since August, as geopolitical concerns intensified. Market participants are also focused on upcoming U.S. employment data and the implications for Federal Reserve policy, particularly regarding interest rates. Overall, the financial landscape is influenced by central bank signals, geopolitical risks, and economic data forecasts.