GBP/USD Holds Firm in Positive Territory Amid Hawkish BoE Sentiments and USD Dynamics
The GBP/USD pair sustains its positive momentum for the fourth consecutive day, hovering near the 1.2535-1.2540 range during Wednesday’s Asian session, just shy of its highest mark since September 9, achieved the day before.
The British Pound garners support from recent hawkish comments by Bank of England (BoE) officials.
BoE Governor Andrew Bailey, in his address to the Treasury Select Committee, cautioned against underestimating UK inflation’s tenacity, suggesting that interest rates will remain elevated longer than market anticipations. This stance, coupled with a subdued US Dollar, provides an impetus to the GBP/USD pair.
The US Dollar, meanwhile, exhibits difficulty in leveraging the hawkish Federal Reserve’s October meeting minutes, which advocated for a prolonged period of high-interest rates. However, this sentiment is somewhat eclipsed by market beliefs that the Fed will maintain steady rates, with a rate cut potentially on the table for the April-May 2024 meeting. This anticipation depresses the yield on the 10-year US government bond, thereby supporting the Pound’s advancement.
Looking ahead, UK Finance Minister Jeremy Hunt’s autumn statement and the latest independent forecasts from the OBR are keenly awaited. Hunt’s tax and spending plan amendments could significantly influence the GBP/USD dynamics. Additionally, US economic data, including Weekly Initial Jobless Claims and Durable Goods Orders, will likely provide further direction.
Technically, GBPUSD shows a narrow range movement around 1.2540, maintaining the bullish outlook for the intraday, with an initial target at 1.2590. Breaching this level could accelerate gains towards 1.2720. However, sustaining the bullish trend hinges on the pair’s stability above the 1.2460 and 1.2430 levels.
The trading range for today is expected between the 1.2480 support and 1.2620 resistance levels, with the overall trend forecasted as bullish.
GBP/USD Live Chart
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