GBP/USD Price Forecast: Bears retain control near five-month low ahead of BoE on Thursday
The GBP/USD pair struggles to gain any meaningful traction at the start of a new week amid mixed fundamental backdrop and remains within striking distance of its lowest level May 12, touched last Friday. Worries that a prolonged US government closure could affect economic performance keep a lid on the US Dollar’s (USD) post-FOMC rally to a three-month high, which, in turn, is seen as a key factor acting as a tailwind for the currency pair. The US government shutdown enters Day 33 on Monday amid a deadlock in Congress on the Republican-backed funding bill. Trump again urged Republican senators to end the shutdown by abolishing the filibuster rule, an unprecedented move that GOP leaders have, so far, resisted.
However, the US Federal Reserve’s (Fed) hawkish tilt helps limit a deeper USD pullback. This, along with concerns about the UK’s fiscal situation, might hold back traders from placing aggressive bullish bets around the British Pound (GBP) and cap the GBP/USD pair. The Office for Budget Responsibility (OBR) is expected to lower its UK productivity forecast by approximately 0.3%, which could exacerbate the budget deficit by over £20 billion by 2030. Current UK government finances already reflect a £22 billion shortfall, putting pressure on Chancellor Rachel Reeves to increase taxes or borrow more in the November budget. Read more…
GBP/USD Weekly Forecast: Pound Sterling faces BoE test as budget woes weigh
The Pound Sterling (GBP) accelerated its recent declines against the US Dollar (USD), as GBP/USD briefly revisited levels under the 1.3150 psychological mark.
Market sentiment was largely driven by hopes of a US-China trade deal and the anticipation of dovish US Federal Reserve (Fed) monetary policy announcements at the start of the week, fuelling fresh declines in the USD. Read more…
