GBP/USD Rebounds Above 1.32—Will It Hold?
GBP/USD rebounded from support at 1.3140 (its lowest since May) and strengthened in Thursday's Asian session, briefly returning above 1.3200. The rise was supported by a moderate weakening of the US dollar after the DXY retreated from a two-week high. Market concerns that a prolonged US government shutdown could hurt the economy also weakened the greenback and provided room for a rally in the pound.
However, the pound's upside remains limited. Jerome Powell dismissed the possibility of a December rate cut, while anxiety ahead of the Trump-Xi meeting increased demand for safe-haven assets—a factor that could restrain dollar weakness. On the UK side, fiscal issues also loom: reports suggest the OBR will cut its productivity projections by ~0.3%, widening the fiscal gap by >£20 billion, thus curbing aggressive buying of GBP.
Looking ahead, the market awaits the Autumn Budget (November 26) from Chancellor Rachel Reeves and Bank of England policy signals. Currently, market participants assess a 68% chance of a 25 bps rate cut in December amid softening inflation and fiscal pressures. Technically, convincing follow-through buying is needed to confirm a short-term bottom at 1.3140 before opening the door to further appreciation. (az)
Source: Newsmaker.id
