GBP/USD has a cautious bias ahead of the Bank of England meeting | 06 Febrero 2025

Event to pay attention to today:

14:00 EET. GBP - BOE Monetary Policy Report

GBPUSD:

GBP/USD is seeing some trading amid a weaker dollar in the broad market. Market sentiment is drifting to the upside as investors recover from trade war fears earlier in the week and cable traders duck in anticipation of the Bank of England's (BoE) latest rate decision.

US employment change data from ADP came in stronger than expected in January, showing a net increase in employment of 183k, beating expectations for a fall to 150k from December's revised 176k.The ADP employment data is a shaky outlook for US non-farm payrolls (NFP) data due out later in the week, but its rise bolsters investor confidence that the US economy remains on solid footing.

The Bank of England is widely expected to cut interest rates by 25bp on Thursday. According to average market forecasts, the Bank of England's Monetary Policy Committee (MPC) will vote eight to one in favour of cutting interest rates to 4.5 per cent from 4.75 per cent, with the sole abstainer voting to keep interest rates unchanged for another meeting.

The key data this week will be the US jobs data from NFP on Friday. Investors are expecting the January NFP figure to fall to 170K from December's 256K. Traders will also keep a close eye on revisions to previous months' data.

Trading recommendation: Watch the level of 1.2460, when fixing below consider Sell positions, when rebounding consider Buy positions.

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