GBP/USD stabilizes as BoE rate decision looms amidst market caution
|- The Pound Sterling trades without a clear direction ahead of the BoE meeting.
- Expectations of a Bank of England interest rate cut fuel investor caution.
- The US Dollar holds firm, supported by fading dovish bets on the Federal Reserve.
GBP/USD stabilizes around 1.3140 at the start of the week, virtually unchanged for the day. The Pound Sterling (GBP) trades cautiously ahead of Thursday’s Bank of England (BoE) policy announcement, as markets assess the likelihood of a monetary easing move.
According to a Reuters report, traders see roughly a one-in-three chance of a 25-basis-point rate cut to 3.75%. Such expectations have strengthened after slower UK consumer price growth and signs of moderating labor demand seen in employment data for the three months ending in August. During its September meeting, the BoE already indicated that inflationary pressures were expected to peak around 4% the same month.
Analysts remain divided. Goldman Sachs expects a 25-basis-point rate cut, while ING anticipates the central bank will hold rates steady in a narrow 5-4 vote. This uncertainty continues to drive volatility in the Pound Sterling ahead of the decision.
On the US side, the US Dollar (USD) remains firm, supported by reduced expectations for a December interest rate cut by the Federal Reserve (Fed). Fed Chair Jerome Powell recently stressed that no decision had been made regarding December, cooling hopes for near-term easing.
Data from the Institute for Supply Management (ISM) showed that US manufacturing activity remained in contraction, with the Manufacturing Purchasing Managers’ Index (PMI) falling to 48.7 in October from 49.1 previously. This weaker industrial activity has not weighed on the Greenback, as investors remain on the sidelines ahead of upcoming employment data and the Fed’s next move.
Against this backdrop, the GBP/USD pair is likely to remain range-bound in the short term, with market attention focused on the Bank of England meeting, which could set the tone for the remainder of the year.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.05% | 0.09% | 0.31% | 0.17% | 0.19% | 0.32% | |
| EUR | -0.07% | -0.00% | 0.00% | 0.24% | 0.10% | 0.14% | 0.28% | |
| GBP | -0.05% | 0.00% | 0.04% | 0.24% | 0.12% | 0.14% | 0.29% | |
| JPY | -0.09% | 0.00% | -0.04% | 0.21% | 0.09% | 0.25% | 0.27% | |
| CAD | -0.31% | -0.24% | -0.24% | -0.21% | -0.16% | -0.09% | 0.05% | |
| AUD | -0.17% | -0.10% | -0.12% | -0.09% | 0.16% | 0.04% | 0.20% | |
| NZD | -0.19% | -0.14% | -0.14% | -0.25% | 0.09% | -0.04% | 0.14% | |
| CHF | -0.32% | -0.28% | -0.29% | -0.27% | -0.05% | -0.20% | -0.14% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.