GBP/USD moves below 1.2500 ahead of BoE policy decision

GBP/USD extends losses ahead of the interest rate decision by BoE on Thursday.
BoE is expected to maintain its policy rate at 5.25% until September.
The US Dollar is strengthening on the expectations of the Fed keeping higher rates for an extended period.

Akhtar Faruqui FXStreet

GBP/USD extends its losing streak for the third successive day, trading around 1.2490 during the Asian session on Thursday. Thursday brings the Bank of England (BoE) interest rate decision, with expectations of maintaining interest rate at 5.25%.

Investor expectations regarding potential interest rate cuts by the Bank of England (BoE) have been delayed until September, amid concerns about strong wage growth in the United Kingdom (UK). This wage growth is contributing to core inflation, which is the central bank's preferred inflation measure. The annual inflation rate dropped to 3.2% in March, down from 3.4% in February. However, it stayed slightly above the market expectation of 3.1%. This marked the lowest rate since September 2021.

Across the pond, the US Dollar (USD) is gaining ground due to the expectations of the Federal Reserve (Fed) maintaining higher interest rates. Additionally, the higher US Treasury yields support for the US Dollar (USD), undermining the GBP/USD pair.

From the Federal Reserve (Fed), Boston Fed President Susan Collins emphasized on Wednesday the importance of a period of moderation in the US economy to achieve the central bank's 2% inflation target. On Tuesday, Minneapolis Fed President Neel Kashkari said that the prevailing expectation is for rates to stay unchanged for a considerable period, as per Reuters reports.

GBP/USD

Overview
Today last price	1.2491
Today Daily Change	-0.0007
Today Daily Change %	-0.06
Today daily open	1.2498

Trends
Daily SMA20	1.2482
Daily SMA50	1.2604
Daily SMA100	1.264
Daily SMA200	1.2545

Levels
Previous Daily High	1.2516
Previous Daily Low	1.2468
Previous Weekly High	1.2635
Previous Weekly Low	1.2466
Previous Monthly High	1.2709
Previous Monthly Low	1.23
Daily Fibonacci 38.2%	1.2486
Daily Fibonacci 61.8%	1.2497
Daily Pivot Point S1	1.2472
Daily Pivot Point S2	1.2446
Daily Pivot Point S3	1.2424
Daily Pivot Point R1	1.252
Daily Pivot Point R2	1.2542
Daily Pivot Point R3	1.2568

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold stalls recovery from three-month low as Fed hike bets and USD uptick cap gains

Gold struggles to capitalize on a modest intraday bounce from levels below the $4,000 psychological mark, or a three-month low set during the Asian session, and sticks to a negative tone for the second straight day. The Federal Reserve recently signaled that there is no urgency to raise interest rates. Traders, however, are still pricing in around an 80% chance that the US central bank will raise borrowing costs again at its December policy meeting.

Bitcoin, Ethereum, and Ripple rebound as major support levels cap recent sell-off

Bitcoin, Ethereum and Ripple rebound modestly on Friday after correcting and testing their key support zone the previous day. BTC holds the 50-day EMA, ETH finds support around the 100-day EMA, while XRP holds the horizontal floor near $1.300. The price action of these top three cryptocurrencies suggests a recovery if this critical support zone holds; a decisive close below these levels suggests a deeper correction.

The week ahead – UK budget, Shell, BP and HSBC and NatWest results

Financial markets have undergone another turbulent week with concerns about public sector debt levels, the impact of energy policy and higher oil and gas prices, and what events in France might mean for the UK economy going forward.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.