empty
18.12.2024 12:26 AM
The Pound Has a Chance for a Corrective Upside Move

The latest adjustments to forecasts for the Bank of England's decision on Thursday suggest that the rate will remain unchanged at 4.75%. As no updated GDP and inflation forecasts will be presented at this meeting, the market's reaction will likely be quite muted.

There are no substantial grounds for surprises that could contradict the forecasts. Headline inflation in October was slightly above expectations, but more importantly, price growth in the services sector met predictions. Economic growth was somewhat weaker than expected, but it is still unclear if it is weak enough to exert pressure on the BoE's decision.

On Friday, a significant batch of economic data was released, with October's industrial production report standing out as it performed much worse than expected. Additionally, NIESR's growth rate assessment for GDP was revised downward to zero. Monday's Manufacturing PMI data further compounded this disappointing result, which unexpectedly fell from 48 to 47.3, sinking deeper into contraction territory. For now, weakness in manufacturing is being offset by growth in the services sector, which increased from 50.8 to 51.4. This compensation is likely sufficient for the BoE to refrain from cutting rates due to concerns about a rapid economic slowdown.

This image is no longer relevant

The labor market report published on Tuesday has undoubtedly increased the likelihood that the BoE will keep rates unchanged. Average wage growth, including bonuses, for the three months ending in October unexpectedly rose from 4.4% to 5.2%. This strong growth supports persistent inflation and is driven by internal factors that cannot be attributed to seasonality or base effects. This will continue to fuel price increases.

We believe the BoE will deliver the result anticipated by the market – the rate will not be reduced. Since the meeting will occur a day after the Federal Reserve's meeting, where the rate is likely to be cut, the pound could gain a short-term advantage over the dollar and recover some of its losses. However, this advantage will likely fade quickly. The market anticipates rate cuts at every BoE meeting in the first half of 2025 as the base effect for inflation dissipates. By year-end, the rate is expected to fall to 3.25%, lower than the Fed's rate. Given the overall weakness in UK economic growth, this will be a key argument for continuing the downward trend in GBP/USD.

The British pound is one of the few currencies holding firm against large-scale USD purchases. Over the reporting week, the net long position increased by $634 million to $2.165 billion. The bullish bias indicates at least short-term resilience before the BoE meeting. However, compared to the peak in July, losses are still significant, and overall positioning does not appear to be a solid foundation for strong growth. The estimated price attempts to turn upwards but remains significantly below the long-term average.

This image is no longer relevant

The GBP/USD pair can develop another corrective wave toward the 1.2830/40 resistance zone, especially if the BoE's meeting outcome is more hawkish than the market currently expects. However, in the longer term, the pound's prospects remain bleak. The current growth is based on temporarily rising inflation, which stems from base effects and will lose relevance in a few months. The more likely scenario is a return to the downward trend following the market's reaction to the BoE decision, with the long-term target at 1.23.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

Análisis del par GBP/USD. El 5 de mayo. Reuniones del Banco de Inglaterra y la Fed.

El par de divisas GBP/USD tampoco logró ni subir ni bajar durante el día. Muchos expertos interpretaron los datos laborales y de desempleo de EE.UU. como positivos, simplemente porque

Paolo Greco 08:09 2025-05-05 UTC+2

Análisis del par EUR/USD. 5 de mayo. Nueva semana de sufrimiento para el dólar.

El par EUR/USD el viernes en general se mantuvo en su nivel. Durante el día se observó tanto subida como caída. Para el dólar es una suerte el hecho

Paolo Greco 08:09 2025-05-05 UTC+2

Análisis del par GBP/USD. El 2 de mayo. La divisa estadounidense subió por poco tiempo

El par de divisas GBP/USD continuó cayendo durante el jueves. El dólar fortaleció sus posiciones durante tres días consecutivos, para lo cual objetivamente no había ninguna razón. El contexto macroeconómico

Paolo Greco 07:32 2025-05-02 UTC+2

Análisis del par EUR/USD. El 2 de mayo. Al dólar le espera un nuevo colapso. Y no será el último.

El par de divisas EUR/USD volvió a negociarse el jueves con bastante calma, pero esta vez la divisa estadounidense ya no logró mostrar un fuerte crecimiento. Lo bueno, en pequeñas

Paolo Greco 07:32 2025-05-02 UTC+2

Análisis del par EUR/USD. El 30 de abril. El mayor misterio de 2025 ha sido revelado.

El par EUR/USD continuó negociándose el martes dentro de un rango limitado con una volatilidad bastante baja. En realidad, 80 puntos por día para el euro es un valor

Paolo Greco 07:32 2025-04-30 UTC+2

Análisis del par GBP/USD. El 30 de abril. La democracia ficticia de EE.UU. y el impeachment a Trump.

El par GBP/USD se corrigió ligeramente a la baja después de subir el lunes sin motivo aparente. Sin embargo, llamar a este movimiento mínimo hacia abajo un «crecimiento del dólar»

Paolo Greco 07:32 2025-04-30 UTC+2

EUR/USD. Negociación en rango a la espera de informes importantes

El par EUR/USD lleva ya dos semanas consecutivas operando dentro de la figura 13 (con avances puntuales hacia la figura 14), reaccionando a todos los eventos fundamentales dentro del rango

Irina Manzenko 13:09 2025-04-29 UTC+2

Análisis del par GBP/USD. El 29 de abril. ¿Son importantes los datos de desempleo y del mercado laboral?

El par de divisas GBP/USD también se negoció el lunes con baja volatilidad y prácticamente en una dirección lateral, aunque la libra esterlina mantiene una ligera inclinación alcista. A pesar

Paolo Greco 07:40 2025-04-29 UTC+2

Análisis del par EUR/USD. El 29 de abril. Los débiles se rinden, los fuertes resisten.

El par de divisas EUR/USD el lunes permaneció inmóvil. No hubo noticias de Donald Trump sobre disputas comerciales durante el fin de semana, y para el propio lunes

Paolo Greco 07:40 2025-04-29 UTC+2

Análisis del par GBP/USD. El 28 de abril. A la libra solo le queda no estropear su celebración.

El par de divisas GBP/USD el viernes también se negoció con baja volatilidad y sin ningún entusiasmo. Sin embargo, la libra esterlina todavía mantiene una ligera inclinación alcista

Paolo Greco 07:28 2025-04-28 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.