The Pound Sterling (GBP) gains against its peers, except antipodeans, on Wednesday. The British currency attracts bids even as United Kingdom (UK) fiscal risks have resurfaced, following the government borrowings report from the Office for National Statistics (ONS) on Tuesday.

The report showed that the administration raised the second-highest amount of funds since 1993 in order to mitigate the increase in debt costs, which accelerated due to higher inflation. Mounting UK borrowings pave the way for tax increases by the administration in its upcoming Autumn Statement.

Meanwhile, investors await the release of preliminary S&P Global Purchasing Managers' Index (PMI) data of July on Thursday. Investors will closely monitor the PMI data as it will indicate whether the hiring trend in the United Kingdom (UK) private sector is still sluggish. Private employers slowed down their hiring trend to offset the rising cost of social security schemes.

Economists expect the Composite PMI to come in at 51.9 against 52.0 in June, suggesting that the overall business activity continued to expand, but at a moderate pace.

On the monetary policy front, market experts are increasingly confident that the Bank of England (BoE) will cut interest rates at its August monetary policy meeting. Brokerage houses including Bank of America (BofA) Global Research, Citigroup, Morgan Stanley, and Goldman Sachs have anticipated a 25 basis points (bps) interest rate reduction in the policy meeting next month.

Source: Fxstreet