GBP/USD posts modest gains above 1.3000, traders await US private payroll data
The GBP/USD pair posts modest gains near 1.3025 during the early European session on Wednesday, bolstered by a softer US Dollar (USD). However, the potential upside for the major pair might be limited, as UK Finance Minister Rachel Reeves hinted at broad tax rises in her budget later this month. The US October private payroll and ISM Services Purchasing Managers Index (PMI) reports will be published later on Wednesday.
Rachel Reeves, on Tuesday, gave a clearer indication that tax hikes are coming in her Autumn Budget later in November. The Sunday Times reported that Reeves was looking at more than 100 possible tax and spending options, with a focus on the top third of earners. Reeves emphasized her commitment to her fiscal rules and did so again on Tuesday, saying it was “iron-clad.” The Cable is likely to stay on the back foot ahead of the UK Autumn Budget on November 26 as expectations mount for tax hikes. Read more…
GBP/USD plunges into new lows as losses accelerate
GBP/USD fell further on Tuesday, making a clean downside break of the 1.3100 handle and shedding around 0.9% over a single day as Cable losses continue to pile on. The Pound Sterling (GBP) has closed flat or down against the US Dollar (USD) for all but two of the last 12 consecutive trading sessions as GBP/USD races toward a third straight week of one-sided declines.
Little of note lies on the UK side of this week’s data docket until the BoE’s upcoming interest rate decision on Thursday. Even here, little change is expected. The Monetary Policy Committee (MPC) is expected to vote six-to-three to keep interest rates unchanged. The addition of another rate cut vote will be of some note for particularly attentive central bank policy wonks; however, meaningful changes in the BoE’s interest rate stance are unlikely to materialize with the UK’s headline inflation rate standing at 3.8% as of August, nearly double the BoE’s preferred 2% target band. Read more…
GBP/USD hits seven-month low as UK fiscal concerns deepen ahead of BoE decision
The British Pound (GBP) remains under pressure against the US Dollar (USD) on Tuesday, with GBP/USD falling to its lowest level since April 11 amid broad-based Greenback strength and growing fiscal concerns in the United Kingdom (UK). At the time of writing, the pair is trading around 1.3047, down nearly 0.70% on the day.
The US Dollar Index (DXY), which measures the Greenback’s performance against a basket of six major currencies, remains resilient, extending its winning streak for a fifth consecutive day to trade near 100.08, marking a fresh three-month high amid waning expectations of a December interest rate cut by the Federal Reserve (Fed). Read more…