The British pound weakened against other major currencies in the European session on Friday, as traders bet on increasing expectation that the Bank of England is likely to opt for interest rate cuts later this year.

The Bank of England left its benchmark interest rate unchanged at a sixteen-year high for the fifth straight session on Thursday.

The Monetary Policy Committee, led by Governor Andrew Bailey, voted 8-1 to keep the bank rate unchanged at 5.25 percent. The rate was the highest since early 2008.

In economic news, data from the Office for National Statistics showed that the U.K. retail sales remained unchanged in February. Retail sales showed a nil growth on month in February after rebounding by revised 3.6 percent in January. Sales were forecast to fall 0.4 percent.

On a yearly basis, overall retail sales fell 0.4 percent, in contrast to the 0.5 percent increase. Sales were forecast to drop 0.7 percent.

Data from the market research group GfK showed that the U.K. consumer confidence stagnated in March, but households turned positive about their future personal financial situation for the first time since 2021.

The consumer sentiment index held steady at -21 in March. The score was forecast to improve to -19.

The sterling held steady against its major rivals in the Asian session today.

In the European trading now, the pound fell to more than a 2-month low of 0.8590 against the euro, a 1-month low of 1.2585 against the U.S. dollar and a 3-day low of 190.73 against the yen, from early highs of 0.8568, 1.2675 and 192.24, respectively. If the pound extends its downtrend, it is likely to find support around 0.87 against the euro, 1.24 against the greenback and 188.00 against the yen.

Against the Swiss franc, the pound edged down to 1.1330 from an early high of 1.1381. The pound may test support near the 1.11 region.

Looking ahead, Canada retail sales for January and budget balance report for March, U.S. Baker Hughes oil rig count data are slated for release in the New York session.

At 12:00 pm ET, Federal Reserve Vice Chair for Supervision Michael Barr will participate in virtually in discussion, "International Economic and Monetary Design" before the Transnational Law Conference on the International Law of Money: "International Economic and Monetary Design, in Washington D.C., U.S.

At 1:00 pm ET, ECB chief economist Philip Lane will give a policy lecture on inflation and monetary policy at Aix-Marseille School of Economics (AMSE) in Marseille, France.

At 4:00 pm ET, Federal Reserve Bank of Atlanta President Raphael Bostic will participate in moderated conversation on "Household Finance" before the 2024 Household Finance Conference organized by the Financial Services Innovation Lab at the Georgia Institute of Technology and the Federal Reserve Bank of Atlanta, in Atlanta, in United States.

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