The British pound (GBP) bounced back against major currencies on Friday after a notable decline the day prior, prompted by the Bank of England’s (BoE) indication of potential interest rate cuts in the near future.
During Thursday’s monetary policy announcement, the central bank decided to keep interest rates steady at 3.75% with a split vote of 5-4. While it was generally anticipated that the BoE would maintain its current rates, the number of Monetary Policy Committee (MPC) members supporting this decision was fewer than the expected seven.
Concerning monetary policy outlook, the BoE emphasized its ongoing “moderate downward trajectory” and expressed optimism that inflation rates would return to the 2% goal “ahead of schedule in November.” Governor Andrew Bailey hasn’t shown support for an interest rate ceiling of 3.25%, a level that neither hampers nor stimulates economic growth.
In response, markets quickly adjusted, pricing in a higher chance of upcoming rate cuts. The pound fell by 0.8% against the US dollar (USD) during this time, hitting a two-week low.
On Friday, traders are keenly awaiting insights from BOE Chief Economist Hugh Pill, who is slated to speak at the National MPC Board of Conferences at 12:00 GMT. Pill backed the decision to keep rates unchanged on Thursday.
GBP price today
The following table displays the percentage change of the British Pound (GBP) against major currencies today, with the pound showing strength against the US dollar.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.29% | -0.02% | -0.11% | -0.44% | -0.41% | 0.00% | |
| EUR | 0.13% | -0.17% | 0.11% | 0.01% | -0.31% | -0.30% | 0.12% | |
| GBP | 0.29% | 0.17% | 0.28% | 0.18% | -0.15% | -0.13% | 0.29% | |
| JPY | 0.02% | -0.11% | -0.28% | -0.09% | -0.42% | -0.41% | 0.01% | |
| CAD | 0.11% | -0.01% | -0.18% | 0.09% | -0.34% | -0.32% | 0.11% | |
| australian dollar | 0.44% | 0.31% | 0.15% | 0.42% | 0.34% | 0.02% | 0.44% | |
| new zealand dollar | 0.41% | 0.30% | 0.13% | 0.41% | 0.32% | -0.02% | 0.42% | |
| swiss franc | 0.00% | -0.12% | -0.29% | -0.01% | -0.11% | -0.44% | -0.42% |
This heat map indicates the percentage change between major currencies, with the base currency listed in the left column and the quote currency along the top row. So, for example, selecting British Pounds from the left and moving to US Dollars will show the percentage change for GBP/USD.
Daily Digest Market movers: Weak US jobs report supports dovish Fed view
- In European trading on Friday, the British pound had gained approximately 0.35% against the US dollar (USD), reaching around 1.3580. The GBP/USD pair had dipped to a new weekly low close to 1.3500 before rebounding.
- A minor correction in the dollar, following a period of its appreciation, also contributed to this trend. The US dollar index (DXY), which measures the dollar against six major currencies, decreased by 0.15%, sitting at roughly 97.80.
- The dollar is facing pressure as traders begin to anticipate that the Federal Reserve might reduce interest rates during its March monetary policy meeting. The likelihood of a 25 basis point cut next month to a range of 3.25-3.50% increased from 9.4% on Monday to 22.7%, according to the CME FedWatch tool.
- The Fed’s dovish stance has strengthened following the release of recent US job market data, revealing ongoing weaknesses in labor demand. The JOLTS jobs report for December indicated that job openings fell to 6.542 million from 6.928 million in November.
- ADP’s report on Wednesday revealed that the private sector added 22,000 jobs in January, a decrease from the 37,000 jobs added in December.
- To gauge the current state of the US labor market, investors are particularly focused on January’s nonfarm payrolls (NFP) data, which will be released on Wednesday.
Technical Analysis: GBP/USD seeks to extend recovery above 20-day EMA
As of now, GBP/USD has climbed to nearly 1.3580. The 20-day exponential moving average (EMA) has eased to 1.3591 following a consistent rise, but the price remains slightly beneath it, dampening any immediate upside momentum.
The 14-day Relative Strength Index (RSI) sits at 50 (neutral), suggesting that momentum has lessened from previous overbought conditions.
The flattening 20-day EMA implies ongoing consolidation in the short term, but an increase in this level indicates a potential upward trend. If there’s a significant daily close above 1.3591, it could extend the rally towards the February 4 high of 1.3733, while a repeated rejection might keep the currency pair fluctuating within a range.
(The technical analysis in this story was written with the help of AI tools.)
