Pound Sterling Price News and Forecast: GBP extends rally as Republicans lose both US Houses

FXStreet Team FXStreet

British Pound extends rally as Republicans lose both US Houses

The British Pound (GBP) posts a fresh seven-week high at around 1.3500 against the US Dollar (USD) in the European trade on Wednesday. The GBP/USD pair strengthens as the victory of United States (US) Democrats in both houses of Federal law has weighed heavily on the US Dollar.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.47% lower to near 101.40. Read more...

Pound at seven-week high: Bank of England takes Centre stage

GBP/USD rose sharply to 1.3463 on Wednesday, remaining near its highest level since 15 September. Over the past four weeks, the pair has gained approximately 1.67%, and over the past 12 months, 3.01%. The pound is supported by expectations that the Bank of England will return to policy tightening, while nervousness over the US midterm election results is weighing on the dollar.

Markets expect the Bank of England to raise interest rates on Thursday for the first time since 2023. The main argument for such a step remains heightened inflation risks amid the war with Iran, combined with the relative resilience of the UK economy. Read more...

British Pound nears 1.3500 against US Dollar amid Trump's defeat in US midterms

The British Pound (GBP) accelerated its rally against a weak US Dollar (USD) on Wednesday, boosted by news that the Democrats took control of the House and the Senate in the US midterm elections held on Tuesday. The GBP/USD has appreciated 0.5% on the day so far, reaching seven-week highs above 0.3480 at the time of writing

News from the US has confirmed resounding disapproval of President Donald Trump’s policies, which has reached strongholds such as Kansas, Ohio, North Carolina, and Texas, which have been governed by Republicans for decades. Read more...

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold reclaims $4,000 and above

Gold manages to regain some composure, leaving behind two consecutive daily pullbacks and reclaiming the area above the key $4,000 mark per troy ounce on Wednesday. The strong decline in the US Dollar, declining US Treasury yields and lower crude oil price all contributes to the yellow metal’s recovery.

Crypto Today: Bitcoin, Ethereum, XRP extend advance as US Dollar slides on Democrats' US midterm victory

Bitcoin trades above $78,000 on Wednesday as risk-on sentiment improves in the broader cryptocurrency market. Ethereum mirrors BTC’s recovery outlook, hovering above $2,300. Ripple similarly exchanges hands above $1.28, marking two consecutive days of gains.

US midterms 2026: Investor Q&A on the Democratic sweep

1. Gridlock replaces the stimulus narrative. A Democratic Congress would constrain Trump's ability to pursue additional fiscal expansion and legislative tax measures. But it cannot simply reverse the president's entire economic agenda. Executive powers, existing legislation and presidential vetoes remain important. 2. AI faces a higher hurdle, not an extinction event.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.