The GBP/USD pair is trading higher, near 1.2600, ahead of the Bank of England’s rate decision. It recovered after declining more than 1% following the Federal Reserve’s hawkish cut on Wednesday. The Pound Sterling gets support as the BoE is widely expected to keep interest rates unchanged.
On Wednesday, the Fed cut its benchmark lending rate to 4.25%-4.50% by 25 basis points. The dot plot indicated only two rate cuts in 2025, fewer than the four projected in September. Fed Chair Jerome Powell said the Fed will be cautious about further cuts due to inflation above 2%.
The GBP/USD pair declined as the USD strengthened after the Fed’s move. But it’s now gaining ground. Data on Wednesday showed the UK Consumer Price Index rose 2.6% year-over-year in November. Core CPI, excluding food and energy, increased 3.5% YoY. Annual services inflation steadied at 5%.
Market Focus and Data to Watch
Traders will be watching several US economic data releases on Thursday. These include the weekly Initial Jobless Claims, Existing Home Sales, and the final reading of Gross Domestic Product Annualized for Q3.
The BoE’s rate decision later in the day is also a key focus. If the BoE keeps rates unchanged as expected, it could further support the Pound Sterling. However, any surprises in the BoE’s stance or in the US economic data could lead to significant movements in the GBP/USD pair.
Related topics：
