GBP/USD gains as BoE sticks to slow rate cuts

GBP/USD Price Forecast: Gains momentum, first upside barrier emerges near 1.3550

The GBP/USD pair trades with mild gains around 1.3510 during the early European session on Tuesday. The Pound Sterling (GBP) strengthens against the US Dollar (USD) as the Bank of England (BoE) guided that monetary policy will remain on a gradual downward path.

The UK central bank cut its benchmark interest rate by 25 basis points (bps) to 3.75% at its December meeting. Governor Andrew Bailey said during the press conference that rates are likely to continue on a gradual downward path, but “how much further we go becomes a closer call” with each cut. Money markets believe the BoE will deliver at least one rate cut in the first half of the year and are pricing in nearly a 50% probability of a second before the year-end, according to Reuters. Read more…

GBP/USD finds key support near 1.35 despite year-end grind

GBP/USD remains bolstered on the high end as markets grind through the last trading week of the year. Cable caught a bullish tilt to keep price action on the high side of the 1.3500 handle, though year-end holiday volumes are unlikely to see significant progress in either direction as 2025 draws to a close.

The UK side of the economic data docket remains thin this week, leaving low-impact market flows in the driver’s seat. The Federal Reserve’s (Fed) latest Meeting Minutes will land on anemic markets on Tuesday, and will serve as a last glimpse at the Fed’s widening array of policy discussion before the calendar year wraps up. Read more…

GBP/USD steadies as markets weigh Fed-BoE rate divergence in thin liquidity

GBP/USD trades around 1.3490 on Monday, down 0.10% on the day at the time of writing. The pair is consolidating after recent moves, as investors remain cautious ahead of year-end and the holiday period, which typically sees thinner liquidity due to the New Year holiday.

The Pound Sterling (GBP) lacks support despite expectations surrounding the Bank of England’s (BoE) monetary policy stance. Markets believe the UK central bank will adopt a gradual pace of monetary easing in 2026, as inflation in the United Kingdom (UK) remains well above the 2% target. Although price pressures have eased in recent months, annual inflation slowed to 3.2% in November after peaking at 3.8% between July and September, limiting the central bank’s room for maneuver. Read more…