GBP/USD Rises as Bank of England Signals Major Rate Decision
Sterling strengthens ahead of critical Bank of England rate decision, with markets pricing in 78.6% probability of a cut despite persistent inflation concerns. Construction sector weakness adds pressure.
Currency traders monitor GBP/USD movements ahead of crucial Bank of England rate decision
Sterling gained momentum on Wednesday as markets brace for the Bank of England's crucial interest rate decision, with the GBP/USD pair showing notable strength ahead of Thursday's announcement.
Rate Cut Expectations Drive Market Sentiment
Market analysts are increasingly confident about an imminent rate cut, with pricing now reflecting a 78.6% probability that the Bank of England will reduce its key interest rate from 4.25% to 4%. This comes despite inflation remaining stubbornly near double the central bank's 2% target in June, similar to challenges faced in other economies where economic indicators have come under intense scrutiny.
Construction Sector Signals Economic Pressure
Adding complexity to the monetary policy decision, Britain's construction sector has reported its most severe contraction in over five years. The latest S&P Global construction PMI fell sharply to 44.3 in July from 48.8 in June, marking the steepest decline since May 2020. This concerning trend mirrors challenges seen in other regions where economic stability requires careful policy coordination.
Technical Analysis and Trading Levels
The currency pair faces immediate resistance at 1.3415 (38.2% fibonacci), with potential for further gains towards 1.3581 (July 24th high). Support levels are established at 1.3177, with additional backing at 1.3130. These movements reflect broader market dynamics that continue to influence global financial markets.
Trading Recommendation
- Entry Point: 1.3310
- Stop Loss: 1.3250
- Target Price: 1.3380
Siphesihle Dlamini
nvestigative journalist from Mbabane, Siphesihle specializes in civic movements, human rights, and political reform in Eswatini. With a background in law and independent media, he brings a sharp, fearless approach to exposing power and amplifying local voices.