05 November 2024, GBP/USD
GBPUSD:
The GBP/USD currency pair is trading at a similar level to yesterday's close, at around 1.2950, in the early Asian trading session on Tuesday. The outcome of the US presidential election will be closely monitored by traders. On Thursday, the focus will shift to the monetary policy decisions of the Bank of England (BoE) and the US Federal Reserve (Fed).
Strategists have attributed the dollar's decline to the release of a Des Moines Register and Mediacom poll indicating a 47-44% lead for Democratic candidate Kamala Harris over her Republican rival, Donald Trump, in the Iowa caucuses.
On Thursday, the focus will be on the Federal Reserve, which is expected to cut rates by the standard 25 basis points (bps) at its November meeting, rather than repeating the significant 50 bps easing as in the last decision. Based on Fed funds futures, there is an 80% probability of a rate cut in December, while the swaps market indicates a nearly 50% likelihood.
In terms of the British pound, the latest poll of economists conducted by Reuters indicates that the Bank of England is expected to cut the benchmark rate by a quarter of a percentage point to 4.75% when it makes its decision on Thursday. However, the longer-term outlook is less clear, with Bank of England Governor Andrew Bailey unlikely to be hoping for another rate cut before the end of the year.
Trading recommendation: We follow the level of 1.3000, if it is fixed above we consider Buy positions, if it bounces back we consider Sell positions.
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