Pound Sterling moves higher in US presidential election day


  • The Pound Sterling moves higher against the US Dollar in the countdown to the US election.
  • Investors expect the Fed and the BoE to cut interest rates by 25 bps on Thursday.
  • Market participants still assess the impact of the UK budget announcements on the country’s inflation outlook.

The Pound Sterling (GBP) gains slightly to near 1.2980 against the US Dollar (USD) in Tuesday’s London session. The GBP/USD pair rises ahead of the United States (US) presidential election, which will start in the North American session. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, falls slightly to near 103.80.

The Greenback went through a significant unwinding of long positions after the Des Moines Register/Mediacom Poll showed that current Vice President Kamala Harris leads former President Donald Trump by three points in Iowa, the state where Trump won clearly in 2016 and 2020. The US Dollar had a strong run-up in October as traders were pricing in Trump’s victory, given his preference for protectionist policies is expected to support the Greenback’s valuation.

Trump has vowed to levy a universal 10% tariff on all economies, except China – which is expected to face much higher duties – if he wins the presidential election. In addition to that, he also promised to lower corporate taxes, which would likely result in a high inflationary environment.

The US presidential election is the main event this week. However, investors will also focus on the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Thursday. According to the CME FedWatch tool, the central bank is widely anticipated to cut interest rates by 25 basis points (bps) to 4.50%-4.75%. This will be the second interest rate cut by the Fed in a row. However, the size of the cut will be smaller after policymakers voted for a 50 bps rate cut in September.

Daily digest market movers: Pound Sterling awaits BoE policy decision

  • The Pound Sterling trades broadly unchanged against its major peers, with investors focusing on the Bank of England’s (BoE) policy meeting on Thursday. The BoE is expected to cut interest rates by 25 basis points (bps) to 4.75%. This would be the second interest rate cut of the year. Seven Monetary Policy Committee (MPC) members are expected to vote for further policy easing, while the remaining two will likely support keeping rates steady.
  • BoE external member Catherine Mann is expected to be one of two members who would vote to keep interest rates at their current levels. In a panel discussion at the sidelines of International Monetary Fund (IMF) meetings on October 24, Mann – an outspoken hawk – welcomed the release of the soft inflation data but emphasized the need for more slowdown. “In order to get to a target consistent with a 2% inflation rate, services (inflation) still have a long way to go,” Mann said. When asked about her current interest rate stance, Mann said that rate cuts are premature at this stage.
  • Apart from the interest rate decision, investors will look for any comment from the BoE about the impact of the UK Autumn Forecast Statement – unveiled by UK Chancellor of the Exchequer Rachel Reeves last week – on monetary policy and the inflation outlook. After the budget announcement, the Office for Business Responsibility (OBR) said that the announced fiscal measures are both pro-growth and inflationary.

British Pound PRICE Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.20% -0.23% 0.05% -0.15% -0.58% -0.48% -0.29%
EUR 0.20%   -0.03% 0.25% 0.05% -0.39% -0.28% -0.09%
GBP 0.23% 0.03%   0.28% 0.07% -0.36% -0.25% -0.05%
JPY -0.05% -0.25% -0.28%   -0.19% -0.63% -0.55% -0.32%
CAD 0.15% -0.05% -0.07% 0.19%   -0.44% -0.35% -0.13%
AUD 0.58% 0.39% 0.36% 0.63% 0.44%   0.08% 0.30%
NZD 0.48% 0.28% 0.25% 0.55% 0.35% -0.08%   0.20%
CHF 0.29% 0.09% 0.05% 0.32% 0.13% -0.30% -0.20%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Technical Analysis: Pound Sterling strives to extend upside above 1.3000

The Pound Sterling edges higher against the US Dollar to near 1.2980. The GBP/USD pair broadly consolidates inside Monday’s range ahead of the opening of the polls in the US. The near-term trend of the GBP/USD pair remains bearish as it stays below the 50-day EMA at 1.3060 but has found a cushion near the 200-day EMA around 1.2850.

The pair struggles to hold near the lower boundary of the rising channel formation on the daily time frame. A decisive break below this boundary could trigger further declines.

The 14-day Relative Strength Index (RSI) holds above 40.00, signaling a buying interest at lower levels.

Looking down, the round-level support of 1.2800 will be a major cushion for Pound Sterling bulls. On the upside, the Cable will face resistance near the 50-day EMA around 1.3060.

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD trades sideways near 1.0900 amid cautious optimism

EUR/USD trades sideways near 1.0900 amid cautious optimism

EUR/USD trades sideways near 1.0900 on Tuesday. The US Dollar looks to stabilize amid cautious optimism, as uncertainty over the US presidential election outcome lingers. US ISM Services PMI is also in focus, as Americans head to the polls. 

EUR/USD News
GBP/USD clings to modest gains below 1.3000, awaits US election result

GBP/USD clings to modest gains below 1.3000, awaits US election result

GBP/USD trades marginally higher on the day but remains below 1.3000 after finding support near 1.2950 on a broadly subdued US Dollar. Traders eagerly await the outcome of the US presidential election, refraining from placing fresh bets on the major. 

GBP/USD News
Gold holds steady below $2,750 as markets gear up for US election

Gold holds steady below $2,750 as markets gear up for US election

Gold attracts dip-buyers after touching a one-week low on Tuesday and trades above $2,740. XAU/USD draws support from a combination of factors. Fed rate cut bets, declining US bond yields and subdued USD demand continue to act as a tailwind for the precious metal. 

Gold News
Crypto markets brace for volatility in tight race between Trump and Harris

Crypto markets brace for volatility in tight race between Trump and Harris

The US presidential election is one of the most significant events in the world. Due to the influence of the country’s political decisions, policies, and economic approaches, it can significantly impact crypto and global markets. 

Read more
US presidential election outcome: What could it mean for the US Dollar?

US presidential election outcome: What could it mean for the US Dollar? Premium

The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.

Read more
Best Forex Brokers with Low Spreads

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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures