GBP/USD depreciates to near 1.2950 due to market caution ahead of US presidential election

FXStreet
Updated
Mitrade
coverImg
Source: Shutterstock

  • GBP/USD faces challenges as the US Dollar appreciates amid market caution ahead of the US presidential elections.

  • The latest Reuters/Ipsos poll indicates that Harris holds a narrow lead at 46% compared to Trump's 43%.

  • UK's budget features £40 billion in tax increases designed to address public finance shortfalls and support funding for public services.


GBP/USD extends its losses for the second successive day, trading around 1.2950 during the Asian session on Thursday. This downside of the pair could be linked to the solid US Dollar (USD) as a market caution persists amid uncertainty surrounding the upcoming US presidential election.


Former President Donald Trump has made gains among Hispanic men as the November 5 US presidential election approaches. Meanwhile, Harris has seen increased support among white women. The race between the two candidates is extremely close, with Harris holding a slight lead of 46% to 43% in the latest poll conducted from October 16 to 21.


Traders are now focusing on upcoming key US data releases including PCE inflation data on Thursday and Nonfarm Payrolls (NFP) on Friday. On Wednesday, the Greenback encountered headwinds as the US Gross Domestic Product (GDP) annualized expanded by 2.8% in Q3, below 3.0% in Q2 and forecasts of 3.0%. However, the ADP Employment Change reported 233,000 newly added workers in October, marking the largest increase since July 2023.


The Pound Sterling (GBP) dipped following the release of the UK's new Labour government's first budget on Wednesday, which includes £40 billion in tax increases aimed at addressing public finance shortfalls and funding public services, according to CNBC. A significant revenue-generating measure in the budget is an increase in National Insurance (NI) contributions, which are taxes on earnings paid by employers.


Traders are also expected to pay close attention to a keynote speech by Bank of England (BoE) Deputy Governor Sarah Breeden at the Hong Kong Monetary Authority and Bank for International Settlements joint conference on the “Opportunities and Challenges of Emerging Technologies in the Financial Ecosystem.”

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
GBP/USD extends the decline below 1.2850 ahead of UK employment dataThe GBP/USD pair extends its downside to near 1.2840 on Tuesday during the early European session.
Author  FXStreet
22 hours ago
The GBP/USD pair extends its downside to near 1.2840 on Tuesday during the early European session.
placeholder
Weekly Market Outlook: U.S. October CPI Focus and Powell and Fed Officials SpeakInsights – This week, the U.S. will release October CPI data, with inflation expected to face challenges in easing further. Retail sales data will also be closely watched for insights into the economy, guiding the Fed's future policy.
Author  Mitrade
Nov 11, Mon
Insights – This week, the U.S. will release October CPI data, with inflation expected to face challenges in easing further. Retail sales data will also be closely watched for insights into the economy, guiding the Fed's future policy.
placeholder
USD: No reason for US Dollar to hand back gains – INGA quick take on global FX markets this Monday morning sees the US Dollar (USD) largely holding onto gains made on the back of the likely Republican clean sweep, while China's fiscal stimulus has so far failed to move the needle on recovery prospects elsewhere in the world.
Author  FXStreet
Nov 11, Mon
A quick take on global FX markets this Monday morning sees the US Dollar (USD) largely holding onto gains made on the back of the likely Republican clean sweep, while China's fiscal stimulus has so far failed to move the needle on recovery prospects elsewhere in the world.
placeholder
GBP/USD Price Forecast: The bearish outlook remains in play near 1.2900The GBP/USD pair weakens to near 1.2910 during the early European session on Monday.
Author  FXStreet
Nov 11, Mon
The GBP/USD pair weakens to near 1.2910 during the early European session on Monday.
placeholder
Bailey speech: UK labour market giving mixed signalsBank of England (BoE) Governor Andrew Bailey speaks on the policy outlook and responds to questions from the press following the decision to lower the policy rate by 25 basis points (bps) at the November meeting.
Author  FXStreet
Nov 07, Thu
Bank of England (BoE) Governor Andrew Bailey speaks on the policy outlook and responds to questions from the press following the decision to lower the policy rate by 25 basis points (bps) at the November meeting.
Real-time Quote