BoE Trims Interest Rate, GBP Rises
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The Bank of England (BoE) has lowered its key interest rate by 25 basis points to 4.75%, as anticipated by market analysts. However, the central bank refrained from signalling further accelerated easing.
The BoE expressed concerns that the recent government budget could potentially increase inflation by 0.5%.
In response to the rate cut and the expectation of no further reductions in 2024, the pound sterling strengthened.
The GBP/USD currency pair closed Thursday, November 7th, 2024, at $1.30, marking a 0.780% increase from the previous day’s closing price of $1.29.
This positive trend has now extended to six of the last 10 trading days, resulting in a two-week price increase of 0.11%.
However, trading volume declined on Thursday, which, coupled with rising prices, could signal potential divergence and may serve as an early indicator of potential price shifts in the near future.
In the short term, the GBP/USD pair is trading within a narrow, horizontal range.
While this consolidation phase often presents potential buying opportunities, a break below support at $1.2882 could trigger a strong sell signal and potentially mark a shift in the short-term trend.
Data: eToro, FactSet, Morningstar, S&P Capital IQ, ProRealTime, MarketScreener, StockInvest