GBP/USD: Off lows, but weak tone persists on talk of BOE considering negative rates


  • GBP/USD remains in the red near 1.2950, having hit a low of 1.2921 in early Asia.
  • The BOE is reportedly considering pushing rates below zero.
  • The central bank is expected to boost the bond-buying program on Thursday.

While the GBP/USD pair has bounced from session lows, it is still trading in the red as the pound is struggling to draw strong bids on reports that the Bank of England (BOE) is considering implementing negative rates. 

At press time, the currency pair is trading near 1.2951, representing a 0.27% loss on the day. 

The currency pair fell to a low of 1.2921 early Thursday after the Telegraph newspaper reported, without citing any sources, that the BOE is investigating the possibility of driving interest rates into negative territory. The European Central Bank (ECB), Bank of Japan, and Swiss National Bank have been running negative interest policies since at least 2016. However, the strategy has failed to boost inflation to the 2% target. 

The GBP will likely take a beating if the BOE drops hints of an imminent move to sub-zero levels on Thursday.  Economists expect a 100-billion-pounds expansion of the BOE's asset purchase program at Thursday's meeting, according to Reuters. 

Apart from the dovish BOE expectations, the US political uncertainty could hurt the pound. That's because the lack of clarity on the election outcome and the possibility that results are contested in court would reduce the probability of the UK and the US agreeing to a trade deal before Dec. 31. 

Technical levels

GBP/USD

Overview
Today last price 1.2951
Today Daily Change -0.0036
Today Daily Change % -0.28
Today daily open 1.2987
 
Trends
Daily SMA20 1.2992
Daily SMA50 1.2988
Daily SMA100 1.2887
Daily SMA200 1.2707
 
Levels
Previous Daily High 1.314
Previous Daily Low 1.2915
Previous Weekly High 1.308
Previous Weekly Low 1.2881
Previous Monthly High 1.3177
Previous Monthly Low 1.282
Daily Fibonacci 38.2% 1.3001
Daily Fibonacci 61.8% 1.3054
Daily Pivot Point S1 1.2888
Daily Pivot Point S2 1.2788
Daily Pivot Point S3 1.2662
Daily Pivot Point R1 1.3113
Daily Pivot Point R2 1.324
Daily Pivot Point R3 1.3339

 

 

 

 

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