GBP/USD Exchange Rate Unmoved by Bank of England Decision
The Pound to US Dollar (GBP/USD) exchange rate showed little movement on Thursday, trading at $1.3432 following the Bank of England’s (BoE) decision to keep interest rates unchanged at 4.25%.
Key Takeaways from the BoE Meeting
✔ Interest rates held at 4.25% – Six of nine MPC members voted for no change.
✔ Three members pushed for a rate cut – Signaling growing dovish sentiment.
✔ Economic concerns weigh – BoE cited slowing GDP growth and a weakening labour market.
Despite the hold, the Pound (GBP) saw mixed performance:
-
Strengthened vs AUD & NZD – Due to risk-off market sentiment.
-
Stable vs USD & EUR – As traders digested the BoE’s cautious stance.
Why Did the US Dollar (USD) Strengthen?
The Greenback gained support from two key factors:
-
Fed’s Hawkish Stance – The US Federal Reserve held rates but raised 2024 projections, boosting USD demand.
-
Safe-Haven Appeal – Rising Middle East tensions drove investors toward the USD as a refuge.
What’s Next for GBP/USD?
🔹 BoE Rate Cut Expectations – Markets now price in a potential cut by August if economic data weakens.
🔹 Fed Policy Divergence – If the US holds rates longer, GBP/USD could face downside pressure.
🔹 Geopolitical Risks – Further global instability may support the USD over Sterling.
Forecast: Will GBP/USD Break Out of Its Range?
-
Short-term (1-3 months) – Range-bound between $1.33-$1.35 unless BoE/Fed shifts stance.
-
Long-term (6+ months) – Potential GBP weakness if BoE cuts before the Fed.
Key Levels to Watch
📉 Support: $1.3400 (psychological level)
📈 Resistance: $1.3500 (recent high)
