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GBP/USD briefly tumbled back below 1.2400 after the BoE cut rates again.
Despite the rate cut, BoE tones struck a hawkish chord, crimping further bets.
US NFP Friday looms large ahead to cap off the trading week.
GBP/USD shuddered on Thursday, punching in a technical rejection from key averages and testing below the 1.2400 handle. The Bank of England (BoE) trimmed interest rates by another 25 bps, but struck a hawkish tone that saw rate markets tune down their bets of further rate cuts through the remainder of 2025.
According to rate markets, the BoE will likely make another two or three rate cuts through the year. All nine members of the Monetary Policy Committee (MPC) voted for a rate cut, with seven voting for a 25 bps rate trim and two particularly-dovish members voting for a double-cut for 50 bps. Despite the accelerated eagerness of policymakers to deliver a February rate cut, markets only expect another 70 or so basis points to be taken off the BoE’s reference rate this year.
Another Nonfarm Payrolls (NFP) jobs data dump looms on Friday. Net job additions are expected to ease to 170K in January, down from December’s print of 256K. Revisions to older data will be closely watched this week. Post-print revisions drifted toward the stronger side during 2024, frustrating market participants hoping for cracks in the US employment landscape to help push the Federal Reserve (Fed) toward more rate cuts.
GBP/USD price forecast
Thursday’s bearish pullback saw GBP/USD price in a technical rejection of the 50-day Exponential Moving Average (EMA), touching an intraday low near 1.2350. The pair settled the day a little south of 1.2450, but further bearish momentum could be on the cards as bulls struggle to sustain momentum.
GBP/USD daily chart
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