- GBP/USD extends its downside around 1.2140 ahead of key events.
- Federal Open Market Committee (FOMC) is expected to hold the rate unchanged at its November meeting while holding a hawkish stance.
- Bank of England (BoE) is anticipated to keep rates steady amid the fear of potential recession in the UK.
- The FOMC and BoE meetings will be in the spotlight ahead of the US Nonfarm Payrolls data.
The GBP/USD pair remains on the defensive during the early Asian session on Wednesday. The major pair faces rejection near the 1.2200 mark. Market players await the highly anticipated Federal Open Market Committee (FOMC) policy meeting on Wednesday ahead of the Bank of England (BoE) on Thursday. These events might trigger the volatility in the market. GBP/USD currently trades near 1.2139, losing 0.11% on the day.
The two-day FOMC policy meeting begins today and will end in late Wednesday. The markets anticipate the FOMC to hold the interest rate unchanged at its November meeting. Traders will keep an eye on the FOMC Chair Powell’s press conference for fresh impetus. If the FOMC delivers a hawkish message, the US Dollar (USD) might attract some buyers and weigh on the GBP/USD pair.
On the other hand, the Bank of England (BoE) is expected to keep interest rates steady at 5.25% at its November meeting on Thursday amid growing worries about a recession in the UK economy. Following the meeting, BoE governor Andrew Bailey might offer some hints about the latest forecasts for the UK economy and the future of monetary policy.
The weaker UK data and stubborn inflation exert pressure on the British Pound (GBP) and act as a headwind for the GBP/USD pair. Additionally, the elevated geopolitical risks in the Middle East might boost safe-haven flows and benefit the Greenback.
Investors will take cues from the US ADP employment report, JOLTS Job Openings, and the ISM Manufacturing PMI ahead of the FOMC meeting on Wednesday. On Thursday, the BoE rate decision and BoE Governor Bailey's speech will be the highlights. The US employment data, including Nonfarm Payrolls and Average Hourly Earnings for October, will be released on Friday.
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
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.