British Pound extends rally as Republicans lose both US Houses

Source Fxstreet
  • The British Pound refreshes seven-week high at around 1.3500 against the US Dollar.
  • Democrats’ victory in both US houses reflects clear discontent of Republican policies by public.
  • The BoE is widely anticipated to hike interest rates on Thursday.

The British Pound (GBP) posts a fresh seven-week high at around 1.3500 against the US Dollar (USD) in the European trade on Wednesday. The GBP/USD pair strengthens as the victory of United States (US) Democrats in both houses of Federal law has weighed heavily on the US Dollar.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.47% lower to near 101.40.

The victory of Democrats in both the Senate and the House of Representatives has prompted fears of decision-making gridlock around issues such as government funding and the debt ceiling, and tougher restrictions on Artificial Intelligence (AI) spending, ING reported.

On the economic front, investors shift their focus to the US ADP Employment Change and the ISM Services PMI data for September, which will be published in the North American session.

On the United Kingdom (UK) front, investors await the Bank of England’s (BoE) monetary policy announcement on Thursday.

BoE seen kicking off tightening cycle with modest hike as UK data firms

Strategists at Brown Brothers Harriman highlight Thursday’s Bank of England policy decision and accompanying Monetary Policy Report, noting that the BoE is “widely expected to start tightening with a 25bps hike to 4.00% after standing pat all year.” They point out that “firmer UK inflation and economic activity back the move,” while the anticipated vote split is “seen at 7-2 with doves Alan Taylor and Swati Dhingra supporting a hold,” underscoring that not all policymakers are yet convinced of the need to begin a new tightening phase.

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3473, holding a constructive bullish bias as it extends the rebound above the 20-period exponential moving average (EMA) at 1.3358 and the 50% Fibonacci retracement at 1.3406. Price is now trading just over the 61.8% retracement at 1.3469, hinting at an attempt to reclaim higher ground, while the Relative Strength Index (RSI) at 64 suggests firm but not yet extreme upward momentum.

On the topside, immediate resistance is aligned at the 61.8% Fibonacci retracement at 1.3469, with further barriers at the 78.6% level at 1.3560 and the prior swing high near the 100% retracement at 1.3676. On the downside, initial support is seen at the same 61.8% Fibonacci level at 1.3469, followed by the 50% retracement at 1.3406 and the 20-period EMA at 1.3358; a deeper pullback would expose the 38.2% retracement at 1.3342 ahead of the 23.6% level at 1.3263, while the cycle low around 1.3136 acts as a more distant structural floor.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Read more.

Next release: Thu Nov 05, 2026 12:00

Frequency: Irregular

Consensus: 4%

Previous: 3.75%

Source: Bank of England

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Ethereum Drops Below $2,000 After Plunging Over 20% in a Month as Odds of $1,500 Retest SurgeEthereum Plunges Over 20% in a Month, Risking a Retest of $1,500 After Losing the $2,000 Defense Line.On November 13, Ethereum (ETH) plunged more than 5%, officially falling below the key
Author  TradingKey
Yesterday 08: 57
Ethereum Plunges Over 20% in a Month, Risking a Retest of $1,500 After Losing the $2,000 Defense Line.On November 13, Ethereum (ETH) plunged more than 5%, officially falling below the key
placeholder
Gold Price Forecast: Gold Tumbles Below $3,900 as Trump Says No Need for Iran Deal; Can October PPI Spur a Rebound? As of the Asian session on Friday (November 13), gold prices (XAUUSD) rebounded intraday following Thursday's sharp decline, trading near $3,910. Previously, gold tumbled 2.76% on Thursda
Author  TradingKey
Yesterday 06: 29
As of the Asian session on Friday (November 13), gold prices (XAUUSD) rebounded intraday following Thursday's sharp decline, trading near $3,910. Previously, gold tumbled 2.76% on Thursda
placeholder
Brent rose 3.3% and US crude stocks built 4.66 million barrels in the same weekBrent January settled at 95.82, up 3.3%, and WTI at 88.74, up 2.55%, after the US signalled it would not pursue a deal with Iran and attacks on Gulf shipping continued. In the same week, EIA data showed US crude inventories rising 4.657 million barrels against expectations of a 1.1 million draw, with gasoline up another 1.799 million. OPEC output also rebounded 1.96 million barrels a day to 27.16 million in October, led by Saudi Arabia at 10.56 million. This piece separates the geopolitical premium from the physical balance and lays out where each side of the trade is anchored.
Author  Irene Q.
Yesterday 03: 06
Brent January settled at 95.82, up 3.3%, and WTI at 88.74, up 2.55%, after the US signalled it would not pursue a deal with Iran and attacks on Gulf shipping continued. In the same week, EIA data showed US crude inventories rising 4.657 million barrels against expectations of a 1.1 million draw, with gasoline up another 1.799 million. OPEC output also rebounded 1.96 million barrels a day to 27.16 million in October, led by Saudi Arabia at 10.56 million. This piece separates the geopolitical premium from the physical balance and lays out where each side of the trade is anchored.
placeholder
Gold hit a one-year low while central banks bought 321 tonnes — the sellers were never the ones you thinkSpot gold closed at 3,876 on Thursday, down 2.8% and its lowest close in more than a year, with an intraday low near 3,852. The dollar is at a 19-month high of 103.21 and the 10-year yield is at 5.10%, so the price move is easy to explain. What is harder to explain is who sold: central banks bought 321 tonnes in Q3, the PBoC added for a 24th straight month, ETF holdings are near a record 4,256 tonnes, and roughly 95% of the futures selling came from non-reportable and sovereign-type accounts rather than hedge funds. This piece separates the two books that have to balance.
Author  Irene Q.
Yesterday 02: 40
Spot gold closed at 3,876 on Thursday, down 2.8% and its lowest close in more than a year, with an intraday low near 3,852. The dollar is at a 19-month high of 103.21 and the 10-year yield is at 5.10%, so the price move is easy to explain. What is harder to explain is who sold: central banks bought 321 tonnes in Q3, the PBoC added for a 24th straight month, ETF holdings are near a record 4,256 tonnes, and roughly 95% of the futures selling came from non-reportable and sovereign-type accounts rather than hedge funds. This piece separates the two books that have to balance.
placeholder
Today’s Market Recap: Nvidia Drops Over 4% After Jensen Huang Resigns, AMD and Broadcom Both Rise Over 5% On November 12, the three major U.S. stock indices closed slightly lower. Nvidia announced that Jensen Huang had stepped down immediately as CEO and director, draggi
Author  TradingKey
Yesterday 01: 29
On November 12, the three major U.S. stock indices closed slightly lower. Nvidia announced that Jensen Huang had stepped down immediately as CEO and director, draggi
goTop
quote