- The Pound Sterling falls to near 1.2660 against the USD as the latter bounces after plunging on Wednesday.
- Market speculation for the Fed to cut interest rates in December has increased.
- BoE’s Lombardelli supports reducing interest rates gradually amid risks of inflation overshooting the bank’s target.
The Pound Sterling (GBP) dropsto near 1.2660 against the US Dollar (USD) in Thursday’s North American session after failing to visit the round-level resistance of 1.2700 the prior day. The GBP/USD pair is expected to trade sideways amid thin trading volume as United States (US) markets are closed on Thursday and will open for a short duration on Friday on account of Thanksgiving Day.
The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, bounces back to near 106.40 after a sharp sell-off on Wednesday. The USD plunged as investors trimmed the so-called “Trump Trades” with the intention to go light in an extended weekend.
The Greenback was also pressured by weak Durable Goods Orders data for October. New orders for Durable Goods grew by 0.2% in the month, slower than the estimates of 0.5%. Meanwhile, the Personal Consumption Expenditures Price Index (PCE) report for October showed that price pressures rose in line with estimates. The core PCE inflation data – which excludes volatile food and energy prices – rose by 2.8%, as expected, faster than 2.7% in September.
An expected increase in the US PCE inflation data has boosted market expectations for the Fed to cut interest rates by 25 basis points (bps) again in the December meeting. At the time of writing, there is a 68% chance that the Fed will cut its key borrowing rate by 25 bps to the 4.25%-4.50% range next month, escalated from 56% a week ago, according to the CME FedWatch tool.
Going forward, investors will focus on the US ISM Manufacturing Purchasing Managers Index (PMI) data for November, which will be published on Monday. The economic data will show the current status of activities in the manufacturing sector.
Daily digest market movers: Pound Sterling edges higher as BoE seems to follow gradual policy-easing approach
- The Pound Sterling ticks up against its major peers on Thursday. The British currency edges higher but is expected to trade sideways as the United Kingdom (UK) economic calendar has nothing to offer in the later part of the week.
- The performance of the Pound Sterling has remained strong against its peers for a few weeks, except the US Dollar, on expectations that the Bank of England (BoE) will be one of those central banks that will follow a gradual policy-easing approach due to persistent upside risks to inflation.
- BoE Deputy Governor Clare Lombardelli warned about risks of inflation remaining higher than the bank’s forecast where wage growth normalizes at 3.5%-4% and the Consumer Price Index (CPI) around 3% rather than 2% in her speech at King's Business School on Monday. Lombardelli added, “I support a gradual removal of monetary policy restriction.”
- Going forward, the Pound Sterling will be guided by market speculation about whether the BoE will cut interest rates in the December meeting. Traders are highly confident that the central bank will leave its key borrowing rates unchanged at 4.75% next month.
British Pound 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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.29% | 0.10% | 0.32% | -0.07% | 0.00% | 0.17% | 0.20% | |
| EUR | -0.29% | -0.21% | 0.02% | -0.36% | -0.30% | -0.12% | -0.10% | |
| GBP | -0.10% | 0.21% | 0.21% | -0.16% | -0.09% | 0.07% | 0.10% | |
| JPY | -0.32% | -0.02% | -0.21% | -0.38% | -0.30% | -0.19% | -0.12% | |
| CAD | 0.07% | 0.36% | 0.16% | 0.38% | 0.08% | 0.23% | 0.26% | |
| AUD | -0.01% | 0.30% | 0.09% | 0.30% | -0.08% | 0.16% | 0.21% | |
| NZD | -0.17% | 0.12% | -0.07% | 0.19% | -0.23% | -0.16% | 0.03% | |
| CHF | -0.20% | 0.10% | -0.10% | 0.12% | -0.26% | -0.21% | -0.03% |
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).
Technical Analysis: Pound Sterling faces resistance near 1.2700
The Pound Sterling falls to near 1.2650 against the US Dollar in European trading hours on Thursday. The GBP/USD pair corrects after posting a fresh weekly high near 1.2700 the prior day. The recovery move in the Cable came after it found buying interest near the upward-sloping trendline around 1.2550, which is plotted from the October 2023 low around 1.2040.
The 14-day Relative Strength Index (RSI) rebounds after turning oversold. However, the downside bias remains afloat.
Looking down, the pair is expected to find a cushion near the psychological support of 1.2500. On the upside, the 20-day Exponential Moving Average (EMA) around 1.2725 will act as key resistance.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD depreciates due to market caution ahead of US NFP
The Australian Dollar remains subdued against the US Dollar for the second consecutive day on Friday. The AUD/USD pair faces modest headwinds as the USD steadies ahead of the upcoming Nonfarm Payrolls report in the North American session.
USD/JPY: Japanese Yen stands firm near a multi-month high against a broadly weaker USD
The Japanese Yen continues to be underpinned by increasing bets for more BoJ rate hikes. Trade tariff jitters and the risk-off mood further seem to underpin demand for the safe-haven JPY. Expectations for further policy easing by the Fed weigh on the USD and the USD/JPY pair.
Gold price remains depressed ahead of US NFP; trade jitters to limit losses
Gold price trades with negative bias for the second straight day, though a combination of factors continues to act as a tailwind ahead of the crucial US NFP report later this Friday. Rising trade tensions continue to weigh on investors' sentiment.
Crypto AI Tokens: Why FET, NEAR and RNDR could outperform BTC after White House Summit
The White House Crypto Summit is scheduled to hold on Friday. Rather than double-down on BTC, sector-wide price trends show that investors are leaning towards Crypto AI altcoins.
Make Europe great again? Germany’s fiscal shift is redefining the European investment playbook
For years, Europe has been synonymous with slow growth, fiscal austerity, and an overreliance on monetary policy to keep its economic engine running. But a major shift is now underway. Germany, long the poster child of fiscal discipline, is cracking open the purse strings, and the ripple effects could be huge.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.