GBPUSD Analysis – November-24-2023

by InkWell November 24, 2023 · GBPUSD Analysis / Forex Market Analysis

The British Pound (GBP) has recently shown remarkable growth against the US Dollar (USD), breaking past the $1.25 barrier. This performance is the best it’s seen since early September. What’s behind this uptrend? Our technical analysis of GBPUSD sheds light on the key factors influencing this movement.

The shifting outlook regarding the Bank of England’s (BoE) interest rate policies significantly contributes to this rise. This change stems from the vital Preliminary Manufacturing Index (PMI) data. The PMI, a critical economic indicator, highlighted that the UK’s private sector didn’t just maintain stability in November but exceeded market forecasts. This development is particularly noteworthy as it ends a period of contraction lasting three months.

The investor community has reacted to this data by adjusting their expectations regarding the BoE’s rate cuts. A rate cut typically leads to increased spending and borrowing. The likelihood of a 0.25% rate cut by the BoE in August is now seen as more than 50%, with complete certainty of such a cut by September.

UK Finance Minister Jeremy Hunt’s recent announcements aimed at boosting the sluggish economic growth add another layer to this scenario. These measures are vital, especially considering the Office for Budget Responsibility’s (OBR) latest forecasts. These suggest a slower growth rate for 2024 and 2025 and an upward revision in inflation expectations for the following year.

Tags: GBPUSD