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Bank of England supports the British pound and limits its losses

Bank of England supports the British pound and limits its losses | 11 November 2024

11 November 2024, GBP/USD

Bank of England supports the British pound and limits its losses

GBPUSD:

The GBP/USD pair starts the new week on a softer note, although it fails to find continued selling and remains range-bound around the 1.2900 mark amid mixed fundamentals. The US Dollar (USD) is holding below the four-month high reached last week amid expectations that US President-elect Donald Trump's policies will spur inflation and limit the Federal Reserve's (Fed) ability to aggressively ease policy. This, in turn, is seen as a key factor acting as a headwind for GBP/USD, although the Bank of England's hawkish stance is helping to limit rate cuts.

In fact, the Bank of England has warned that the expansive Autumn Budget presented by Chancellor Rachel Reeves is expected to spur inflation, suggesting a cautious stance on rate cuts in 2025. In addition, risk-on sentiment is helping to limit the rise of the safe-haven US Dollar and providing some support for the GBP/USD pair, allowing for some caution before making aggressive bearish bets.

Investors also seem reluctant and may prefer to stand back ahead of important macroeconomic releases from the UK and US. This week's economic calendar includes UK employment data on Tuesday, US consumer inflation data and the Producer Price Index (PPI) on Wednesday and Thursday respectively, followed by preliminary UK Q3 GDP and US retail sales on Friday.

Trading recommendation: Watch the level of 1.2900, if the level is fixed below consider Sell positions, if the level bounces back consider Buy positions.

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David Johnson
Analyst of «FreshForex» company
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