The GBP/USD pair managed to push above 1.2700 during quiet Wednesday trading as traders awaited the Bank of England’s (BoE) rate decision. The BoE is expected to keep rates on hold at 5.25% despite recent weak UK economic data. The midweek holiday in the US kept market volumes low, but trading is expected to pick up on Thursday with the release of the latest US Initial Jobless Claims data.
The BoE’s monetary policy report, along with the rate decision, will be closely watched by investors. The MPC is expected to vote seven-to-two to keep rates unchanged, with two members looking for a rate cut. The GBP technical outlook remains positive, with the currency continuing to grind higher after hitting a near-term low last week. However, resistance is seen at the 200-hour EMA near 1.2725, with support at 1.2675.
The Pound Sterling is the oldest currency in the world and the official currency of the United Kingdom. It is the fourth most traded currency in the world, with key pairs like GBP/USD, GBP/JPY, and EUR/GBP. The value of the Pound Sterling is heavily influenced by the Bank of England’s monetary policy decisions, which are based on achieving price stability. Economic indicators and data releases also impact the value of the GBP, with a strong economy leading to a stronger currency.
Data releases such as GDP, Manufacturing and Services PMIs, and employment figures can all impact the value of the Pound Sterling. A strong economy attracts foreign investment and may prompt the BoE to raise interest rates, strengthening the GBP. On the other hand, weak economic data can lead to a depreciation of the Pound Sterling. The Trade Balance is another important indicator for the GBP, as it measures the difference between exports and imports and can impact the currency’s value.
