- 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
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD weakens to near 0.6200 ahead of Chinese Services PMI release
The AUD/USD pair softens to near 0.6210 during the early Asian session on Monday. The rising bets that the Reserve Bank of Australia (RBA) will be compelled to start cutting interest rates exert some selling pressure on the Australian Dollar.
EUR/USD: Parity looks likely in 2025 as gap between US-European economies widens
The EUR/USD pair started the year changing hands at around 1.1040 and ended near its yearly low of 1.0332. By September, the pair surged to 1.1213 and the Euro seemed on its way to conquer the world.
Gold: Is another record-setting year in the books in 2025?
Gold benefited from escalating geopolitical tensions and the global shift toward a looser monetary policy environment throughout 2024, setting a new all-time high at $2,790 and rising around 25% for the year.
Week ahead: US NFP to test the markets, Eurozone CPI data also in focus
King Dollar flexes its muscles ahead of Friday’s NFP. Eurozone flash CPI numbers awaited as euro bleeds. Canada’s jobs data to impact bets of a January BoC cut. Australia’s CPI and Japan’s wages also on tap.
Week ahead – US NFP to test the markets, Eurozone CPI data also in focus
King Dollar flexes its muscles ahead of Friday’s NFP. Eurozone flash CPI numbers awaited as euro bleeds. Canada’s jobs data to impact bets of a January BoC cut. Australia’s CPI and Japan’s wages also on tap.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.