GBP/USD Price Forecast: Bears opt to lighten their bets ahead of BoE rate decision
The GBP/USD pair trades with a positive bias for the second straight day on Thursday and looks to build on the previous day’s bounce from the vicinity of the 1.3000 psychological mark, or a nearly seven-month low amid a softer US Dollar (USD). Spot prices, however, lack follow-through buying as traders refrain from placing aggressive directional bets ahead of the crucial Bank of England (BoE) policy update.
The UK central bank is expected to hold its key interest rate unchanged at 4.0%, though analysts are not ruling out the possibility of a surprise cut as softer inflation and fiscal headwinds back the case for more easing. Furthermore, emerging signs of a slack in the UK labour market lifted bets for a 25-basis-point (bps) rate cut sooner rather than later. This, along with concerns about the UK’s fiscal situation, is holding back traders from placing aggressive bullish bets around the British Pound (GBP) and acting as a headwind for the GBP/USD pair. Read more…
GBP/USD hovers near lows as Bank of England decision looms
The GBP/USD pair is attempting to find support around 1.3062 on Thursday, with investors cautiously positioning themselves ahead of today’s pivotal Bank of England (BoE) monetary policy meeting. The British currency remains under pressure, trading near a seven-month low against the US dollar and at its weakest level in over two years against the euro.
Market pricing currently implies roughly a one-in-three chance of a 25-basis-point rate cut from the BoE. This uncertainty creates significant asymmetric risk, meaning the pound is poised for a sharp move in either direction once the decision and accompanying statement are released. Read more…
