Wanting to Rise But Struggling, What's Wrong with GBP/USD?
GBP/USD has actually been "queuing" for a rebound for a long time, but as of Thursday, it's still struggling to rise. The market briefly pushed higher, even though the UK's third-quarter GDP data came out worse than expected. However, the gains were short-lived, and selling pressure resurfaced in the final session.
An additional burden came from news that British Prime Minister Keir Starmer was reportedly ready to cancel several planned tax increases. The tax plans were initially intended to improve the UK's fragile financial position. If the taxes were canceled, the market feared the deficit would remain high and the government's fiscal space would become even narrower. This limited confidence in the pound sterling.
In the United States, the government will temporarily reopen, allowing the release of important economic data to resume. However, there's a possibility that October's inflation and employment data will be considered "lost" and never released. This data vacuum makes it difficult for investors to fully assess the state of inflation and the US labor market. As a result, the market remains uncertain about the Fed's next interest rate move. However, the September Nonfarm Payrolls (NFP) employment report is reportedly being prepared for a late release next week. This data will be one of the final benchmarks before the Fed's interest rate decision on December 10th. Currently, market participants assess the chance of a 25 bps rate cut in December at just under 50%, and around a 90% chance of the Fed cutting again on January 28, 2026. This uncertainty over the direction of US interest rates is preventing GBP/USD from forming a strong upward trend. (asd)
Source: Newsmaker.id
