Expectations of a Federal Reserve rate cut and signals of easing in the UK economy have propelled the pound higher against the dollar.
2025-12-03 13:49:09
GBP/USD continued its rebound in early European trading, rising to around 1.3235. The dollar was pressured primarily by market expectations that the Federal Reserve might cut interest rates by 25 basis points at its meeting next week.
Recent dovish signals from Federal Reserve officials, coupled with signs of a slowing US economy, have fueled market expectations for an interest rate cut. According to the CME FedWatch Tool, the market sees nearly an 89% probability of a 25-basis-point rate cut by the Fed.
Analysts said, "The anticipated appointment of Kevin Hassett, a potential dovish successor to the Federal Reserve, has increased market bets on a weaker dollar, providing support for GBP/USD." In the UK, softening inflation, a cooling labor market, and the November autumn budget have all reinforced market expectations of a December rate cut to 3.75% by the Bank of England.
British Prime Minister Keir Starmer emphasized the importance of lowering inflation and interest rates to stimulate business investment and economic growth. The market widely bets on a 90% probability of an interest rate cut, which could be a positive for the pound, but will have a complex impact on the exchange rate, requiring close attention to subsequent economic data and policy developments.
Overall, GBP/USD continued its rebound driven by favorable policies and market risk appetite, but in the short term, attention should still be paid to key economic data for the US dollar and British pound, including US employment and ISM services data, as well as the UK's December interest rate decision.
From the daily chart, GBP/USD is currently trading above its short-term moving averages, indicating bullish momentum. Key technical indicators show that the price has stabilized above the support zone around 1.3200, forming a solid bottom. Short-term resistance is at 1.3280; a decisive break above this level on the daily chart could see the bulls further challenge the psychological level of 1.3300.
The RSI is around 61, indicating strong bullish momentum; the MACD histogram remains above the zero line, suggesting the trend remains upward. Key support levels are at 1.3180-1.3200; a break below this level could lead to a pullback to around 1.3150 for support.
Editor's Note:
The GBP/USD pair is currently showing a short-term bullish bias, primarily driven by expectations of a Fed rate cut and a potential UK rate cut. Technical analysis suggests that short-term bullish momentum remains, awaiting a breakout above key resistance levels. Closely monitor key US and UK economic data and policy developments to determine the next move in the market's direction.
Recent dovish signals from Federal Reserve officials, coupled with signs of a slowing US economy, have fueled market expectations for an interest rate cut. According to the CME FedWatch Tool, the market sees nearly an 89% probability of a 25-basis-point rate cut by the Fed.
Analysts said, "The anticipated appointment of Kevin Hassett, a potential dovish successor to the Federal Reserve, has increased market bets on a weaker dollar, providing support for GBP/USD." In the UK, softening inflation, a cooling labor market, and the November autumn budget have all reinforced market expectations of a December rate cut to 3.75% by the Bank of England.
British Prime Minister Keir Starmer emphasized the importance of lowering inflation and interest rates to stimulate business investment and economic growth. The market widely bets on a 90% probability of an interest rate cut, which could be a positive for the pound, but will have a complex impact on the exchange rate, requiring close attention to subsequent economic data and policy developments.
Overall, GBP/USD continued its rebound driven by favorable policies and market risk appetite, but in the short term, attention should still be paid to key economic data for the US dollar and British pound, including US employment and ISM services data, as well as the UK's December interest rate decision.
From the daily chart, GBP/USD is currently trading above its short-term moving averages, indicating bullish momentum. Key technical indicators show that the price has stabilized above the support zone around 1.3200, forming a solid bottom. Short-term resistance is at 1.3280; a decisive break above this level on the daily chart could see the bulls further challenge the psychological level of 1.3300.
The RSI is around 61, indicating strong bullish momentum; the MACD histogram remains above the zero line, suggesting the trend remains upward. Key support levels are at 1.3180-1.3200; a break below this level could lead to a pullback to around 1.3150 for support.
Editor's Note:
The GBP/USD pair is currently showing a short-term bullish bias, primarily driven by expectations of a Fed rate cut and a potential UK rate cut. Technical analysis suggests that short-term bullish momentum remains, awaiting a breakout above key resistance levels. Closely monitor key US and UK economic data and policy developments to determine the next move in the market's direction.
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