The Pound has bounced up from session lows near 1.3135, to hit session highs near 1.3180, but remains moving within previous ranges, extending the choppy and sideways trading seen over the last few weeks. Ongoing concerns about the UK’s public finances and hopes of BoE interest rate cuts are keeping GBP bulls in check
The pair whipsawed last week, following news that Prime Minister Keis starmer and Chancellor Rachel Reeves made a U-turn on their plans to increase the income tax at the November 26 budget. The news provides some relief to taxpayers but raises doubts about how to cover the country’s expected fiscal deficit.
Weak UK data boost BoE cut hopes
On the macroeconomic front, things have not been much better. Preliminary Gross Domestic Product data released last week showed that the economy contracted against expectations in the third quarter, with manufacturing and industrial production slumping.
These figures have boosted investors’ expectations that the Bank of England will be forced to cut its benchmark interest rate further in the coming months, probably as soon as December.
In the US, the federal government’s reopening will allow for the release of a stream of delayed US data this week, with a special interest in September’s Nonfarm Payrolls report, scheduled for next Thursday. In the meantime, a cautious market coupled with dwindling hopes of a Fed rate cut in December has been providing some support to the US Dollar.
Source: https://www.fxstreet.com/news/gbp-usd-picks-up-to-13180-with-uk-fiscal-concerns-still-weighing-202511170816
