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GBP/USD Exchange Rate Forecast: Central Bank Speeches to Boost Pairing?

Published 05/12/2024, 08:00
Updated 05/12/2024, 08:40
© Reuters.  GBP/USD Exchange Rate Forecast: Central Bank Speeches to Boost Pairing?
GBP/USD
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ExchangeRates.org.uk - At the time of writing, GBP/USD traded at $1.2664, having seen choppy trade but moving sideways overall.The Pound (GBP) saw volatility on Wednesday as the market mood, Bank of England (BoE) commentary and new data all saw GBP fluctuate.

Sterling initially rose thanks to a risk-on market mood before remarks from BoE Governor Andrew Bailey put some pressure on the Pound.

Bailey said he sees four interest rate cuts in 2025, despite recent fears of persistent inflation.

However, the Pound was spared losses as the UK’s final services PMI printed at 50.8, higher than the preliminary estimate of 50.

While this means that service sector activity still slowed to a near halt last month, it didn’t grind to an absolute standstill.

Meanwhile, the US Dollar (USD) was also choppy on Wednesday, although it was strengthening against its weaker peers.

The safe-haven ‘Greenback’ managed to avoid losses despite the positive market mood.

USD continued to draw support from policy expectations under a Donald Trump presidency and interest rate speculation.

With Trump vowing to levy hefty tariffs on partners and rivals alike – including Mexico, Canada, the EU and China – his policies could prove inflationary.

This, in turn, could force the Federal Reserve to keep interest rates higher for longer.

Looking forward, Thursday brings speeches from policymakers at the British and US central banks, which could drive movement in GBP/USD.

Any remarks from Federal Reserve official Thomas Barkin indicating that he supports a December interest rate cut could weigh on the US Dollar.

Meanwhile, hawkish Bank of England rate-setter Megan Greene could boost Sterling if she argues for rates to remain unchanged this month.

In addition, the latest US initial jobless claims figure could impact USD.

If claims held steady in the week ending 30 November, this could provide the US Dollar with support amid signs of a robust labour market.

This content was originally published on ExchangeRates.org.uk

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