American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

GBP/USD forecast: pound could rebound after Fed, BoE decision

by admin November 7, 2024
November 7, 2024
GBP/USD forecast: pound could rebound after Fed, BoE decision

The GBP/USD exchange rate retreated for six consecutive weeks, reaching its lowest level since August 12. It has retreated by almost 4% from its highest level this year as traders focus on the US election and the upcoming Federal Reserve and Bank of England (BoE) interest rate decisions.

US bond yields jump after Trump’s victory

The GBP to USD exchange rate continued falling after US government bond yields surged to the highest level since July this year after the US election. The ten-year jumped to 4.47%, while the 5-year soared to 4.3%.

This performance was a continuation of what has been happening since September 11, when bond yields fell.

Bond yields rose after Donald Trump won the election on Wednesday. In his campaign, Trump focused on several issues like tax cuts, deregulation, and tariffs. Some of these measures, especially tariffs, will be highly inflationary, which could push the Fed to embrace a more hawkish tone in the future.

Some Trump’s policies could also lead to more geopolitical issues, which will be a positive thing for the US dollar.

Looking ahead, the next important catalyst for the GBP/USD pair will be the Federal Reserve interest rate decision, which will happen on Thursday.

Economists believe that the Fed will decide to cut interest rates by 0.25% in this meeting as it continues to engineer a soft landing for the American economy. The bank has already slashed interest rates by 0.50% in a previous meeting. 

Odds of another cut rose after the US published weak jobs numbers on Friday. According to the Bureau of Labor Statistics (BLS), the economy created just 12,000 jobs in October, while the unemployment rate remained above 4.0%. 

Bank of England’s decision ahead

The next important catalyst for the GBP/USD pair will be the Bank of England decision, which comes a week after Rachel Reeves unveiled her budget. The budget will have tax increases and more spending.

Economists expect that the BoE will also maintain a dovish tone in the coming meeting by cutting interest rates by 0.25%. 

It hopes that these cuts will lead to a stronger economic recovery in the coming months. Besides, recent data has showed that the economy was doing much better than expected. 

For example, the economy expanded in August after contracting in the previous two consecutive months. Also, the manufacturing and services PMIs have remained above 50 in the past few months.

At the same time, UK’s inflation has continued falling and moved below the 2% target zone. The closely-watched services inflation has also continued moving downwards. 

Therefore, a BoE cut will likely not have a major implication in the GBP/USD pair since it has already been priced in by market participants.

Analysts at ING expect the bank to cut, with seven members supporting it and two opposing. If this happens, they see the GBP/USD pair falling by just 50 pips. They wrote:

“Given that interest rate markets since mid-September have re-priced the BoE landing point some 75bp higher, we think upside risks to sterling from BoE communication are quite limited. Instead, a BoE staying focused on the easing cycle this week could see sterling correct lower.”

GBP/USD technical analysis

GBP/USD chart by TradingView

The four-hour chart shows that the GBP/USD exchange rate has been under intense pressure in the past few weeks. It has dropped from a high of 1.3435 in September to the current 1.2925. 

The pair has constantly remained below the 50-period and 25-period moving averages, implying that bears are in control.

It has also moved below the 61.8% Fibonacci Retracement point. Also, it has formed a small double-bottom pattern at 1.2843.

Therefore, there is a likelihood that it will stage a comeback as the Trump election fears ease. If this happens, it could rise to the key resistance level at 1.3050, its highest point on November 6.

The post GBP/USD forecast: pound could rebound after Fed, BoE decision appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Motorola stock is firing on all cylinders: it’s risky to buy now
next post
Why has the SPDR Financial XLF ETF surged to a record high?

Related Posts

Building A Growing West Australian Gold Producer

August 1, 2024

GE Vernova stock is firing on all cylinders:...

October 7, 2024

Option to Acquire Residual 49% of Comet Vale...

July 17, 2024

USD/BRL forecast amid Fed and Brazil Central Bank...

December 13, 2024

These S&P 500 index stocks are leading in...

February 21, 2025

USD/BRL forecast ahead of the Fed and Brazil...

March 16, 2025

Solana price prediction: here’s why SOL may surge...

January 19, 2025

Nikkei 225 index forecast: Why have Japan stocks...

February 19, 2025

The ones we’ve lost: Canoo, Fisker, Nikola, 23andMe,...

March 26, 2025

Golden Deeps Expands Footprint in the World-Class Lachlan...

July 12, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025
    • At Jackson Hole, Fed Chair Powell signals possible cuts while warning of uncertainty

      August 25, 2025
    • Trump threatens to fire Fed Governor Lisa Cook amid mortgage fraud allegations

      August 25, 2025

    Categories

    • Business (3,763)
    • Investing (2,783)
    • Latest News (2,048)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved