GBPUSD Today News - The GBP/USD currency pair has risen for the fifth consecutive day, recording positive movement in eight of the last nine days and reaching a new three-month high during the Asian session on Wednesday.
 
Currently, the spot price is in the range of 1.2715-1.2720, reflecting a 0.20% increase today, and appears poised to continue its upward trend for nearly three weeks following ongoing selling of the US Dollar (USD).
 
The US Dollar Index (DXY), which measures the dollar's value against a basket of currencies, has fallen to its lowest level since August 11, amid rising speculation regarding a series of interest rate cuts by the Federal Reserve (Fed) in 2024.
 
This expectation has been reinforced by dovish comments from Fed Governor Christopher Waller, who stated that current policy is positioned correctly to slow economic growth and bring inflation back to the 2% target.
 
Waller added that there is a strong economic argument that if inflation continues to decline over the next few months, the possibility of lowering policy rates could increase.
 
Additionally, the CME's FedWatch tool shows a probability of around 33% and approximately 65% for interest rate cuts in March and May, respectively. In this context, the yield on US government bonds with a 10-year maturity has fallen to 4.274%, reaching its lowest level since mid-September, further weakening the dollar.
 
The generally positive sentiment surrounding US equity futures has also weighed on the dollar as a safe-haven currency, boosting the GBP/USD pair amid diminishing chances of Bank of England (BoE) rate cuts.
 
Last week, Bank of England Governor Andrew Bailey warned that it is still too early to declare victory over inflation and projected that monetary policy should remain tight for some time to ensure inflation returns to the 2% target.
 
In line with this view, Bank of England Deputy Governor for Markets and Banking, Dave Ramsden, stated on Tuesday that monetary policy may need to remain restrictive for an extended period to bring inflation back to target. This, in turn, is seen as supportive for the British Pound (GBP) and contributes to the rise of the GBP/USD pair.
 
No macroeconomic data relevant to market movements is expected to be announced from the UK on Wednesday. Meanwhile, the US economic calendar will feature the preliminary or second estimate of third-quarter GDP growth.
 
These factors, along with US bond yields, will influence the dynamics of the US Dollar (USD) and provide support for the GBP/USD pair. Traders will look for cues from Bank of England Governor Andrew Bailey's statements during the US session to exploit short-term opportunities. However, the fundamental backdrop continues to favor buyers, reinforcing the prospects for further gains.
 
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Warning!
 
This analysis is based on views from fundamental and technical perspectives from trusted sources and is not intended as advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information to use as a reference in your trading.
 
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