The GBP/USD pair remains on the defensive during the Asian session on Monday, although it lacks bearish conviction and holds above pivotal support of the 200-day simple moving average. Spot prices are currently trading around the 1.3360 area, almost unchanged on the day.
The US Dollar (USD) is looking to build on last week’s modest rebound from its lowest level in over two months, and has become a major factor acting as a headwind for the GBP/USD pair. A slight deterioration in global risk sentiment – as evidenced by the generally weaker tone around equity markets – is expected to provide some support to the safe-haven currency. However, US dollar bulls seem hesitant to place a strong bet amid dovish expectations from the US Federal Reserve.
Despite the Federal Reserve’s dovish signal last week, traders are still anticipating the possibility of two additional interest rate cuts next year, as signs of labor market weakness become increasingly apparent. Furthermore, the prospect of a Trump-aligned Fed chair would keep a lid on any real US dollar recovery and help limit the downside for GBP/USD. Traders also appear hesitant ahead of important economic releases this week and risks from the central bank.
Monthly UK employment details will be published on Tuesday, ahead of the US non-farm payrolls report for October. This will be followed by the latest UK inflation figures on Wednesday and the crucial policy decision of the Bank of England (BoE) on Thursday, which will play a major role in influencing the British Pound (GBP). Aside from this, US consumer price inflation numbers on Thursday could determine the near-term trajectory of GBP/USD.
Economic indicator
Bank of England interest rate decision
the Bank of England The Bank of England announces its interest rate decision at the end of its eight meetings scheduled annually. If the Bank of England is hawkish on the economy’s inflationary outlook and raises interest rates, it is usually bullish for the pound. Likewise, if the Bank of England takes a pessimistic view on the UK economy and keeps interest rates unchanged, or cuts them, this will be seen as bearish for the pound.
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Next release:
Thursday 18 December 2025 at 12:00
repetition:
irregular
consensus:
3.75%
former:
4%
source:
Bank of England
