GBP missed an opportunity to leverage the better-than-expected inflation figures midweek due to remarks by Bank of England Governor Andrew Bailey. He hinted at an imminent interest rate cut, dampening the currency's performance.

Despite Wednesday's release of inflation data showing robust levels for March, Bailey appeared unconvinced by the numbers. "Next month's inflation number will show quite a strong drop," he remarked, indicating that the recent drop in UK inflation aligns with the Bank of England's projections.  Market observers have construed Bailey's comments as a signal of his intention to pursue an interest rate cut come June.

However, Bailey seems satisfied with the notion that the Bank can reduce rates without igniting inflation. This lays the groundwork for a possible scenario where UK rates could decrease more rapidly than those in the U.S. and potentially even the Eurozone.  Such disparity is likely to exert downward pressure on the Pound.

This concern was evident in the GBP/EUR exchange rate, which dipped by 0.28% on the day, slipping below 1.17 and hovering around 1.1670 at the time of this writing.  Meanwhile, the GBP/USD exchange rate remains relatively stable near 1.2464, primarily influenced by a broadly weakened USD.