• UK yields fall amid economic uncertainty
• BoE expected to raise rates twice more this year to 5.75%
• Cable testing key support for a second day

The pound is on the decline again on Thursday, having fallen over the last couple of days on the back of some worrying economic figures from the UK.

Whether we’re talking about a blip in the data or cracks finally appearing in the economy after a very aggressive tightening cycle from the Bank of England, traders are paring back expectations for interest rates once more.

We’re seeing UK 10-year bonds rising today (yields falling) which goes against the trend we’re seeing across Europe, the US, and Japan, for example. Two more hikes are still priced in over the coming months but that could be pared back further if the data continues on the same path, especially if we see some better wage numbers following the spike in the three months to June.

That weakness in the pound may be helping the FTSE to outperform today, with it being one of the only European indices still in the green after early gains – seemingly driven by knockout earnings from Nvidia – fizzled out over the course of the day.

Fourth time’s a charm?

The pound has fallen close to 1.26 on three other occasions so far this month, each time falling a little short somewhere between 1.2610 and 1.2620 before rebounding higher.

The least convincing of these rebounds came yesterday, with the price once again trending down today to once again come close to those prior lows. The difference so far today is there’s no sign of a recovery and, at the time of writing, the price remains below the 55/89-day simple moving average band. On each of the last three occasions, the price closed back within here or higher.

A close below here would be the first since March and if accompanied by a new two-month low and break of 1.26, could be a very bearish signal for cable.

Of course, with Jackson Hole underway, there’ll be a lot of central bank speak over the next couple of days which could sway this one way or another which is worth bearing in mind. But right now, the pair is looking under some pressure.