Skip to content GBPUSD Fundamental Analysis – 8-October-2024
The British pound dropped to under $1.311, marking its lowest point in almost a month. This fall comes as many investors now expect the Bank of England (BoE) to push for steeper rate cuts in November.
BoE Governor Andrew Bailey suggested a shift towards a more “active” and bold approach to cutting rates. However, BoE Chief Economist Huw Pill took a different stance, indicating the need for a more careful and steady approach.
As of this writing, the GBP/USD pair trades at approximately $1.310. The 4-hour chart below shows the price and the bullish bat harmonic pattern.
UK Construction Sector Booms Despite Concerns
On a brighter note, the UK construction industry recorded its fastest growth over two years. While this is positive news for the economy, there are still concerns about future challenges.
Traders and investors are worried about possible government spending cuts and potential tax hikes, which could be outlined in the October 30 budget.
Strong US Jobs Data Complicates Fed Predictions
Across the Atlantic, the US labor market was surprised by a strong jobs report. This has made it less likely that the Federal Reserve will make a significant rate cut, as some had expected.
The substantial job numbers show that the US economy remains resilient, leading to uncertainty about how much the Fed will lower rates.
Final Words
The combination of potential rate cuts in the UK and mixed signals from the US has left investors wondering about the next steps for central banks. While the UK might adopt an aggressive stance, the US could take a more conservative approach.
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