GBP/USD edges higher to 1.3370 as the Bank of England's 25 bps rate hike offsets a strong US labor market report that saw unemployment drop to 4.1%.
The BoE delivered its first hike in over three years, lifting Bank Rate to 4.00% with eight votes for the move and one for 50 bps, and projected inflation around 5% by mid-2027 with another increase signalled unless the Middle East conflict resolves. This hawkish path supports Sterling, though Pill's dovish speech, scoring 4.2/10 versus a 6.4/10 baseline, tempers the outlook.
The US economy added 165,000 jobs in October, far above the 65,000 expected and up from 60,000 in September, while unemployment fell to 4.1% from 4.2%. Markets now price a 79.6% chance of a December Fed hike, up from 72.8%, which supports the Dollar, though it was not enough to stop GBP/USD edging higher.
The pair rebounded to about 1.3370, snapping a two-day losing streak, as the BoE's 25 bps hike to 4.00% with an 8-1 vote and projected ~5% inflation by mid-2027 outweighed a much stronger US jobs report. However, Pill's dovish tone and overhead resistance at the 100-day SMA near 1.3395 cap the upside, so gains may stay limited.
The British Pound rebounded to 1.3370, snapping a two-day losing streak after the Bank of England raised interest rates by 25 bps to 4.00%. While a robust US jobs report showing 165,000 new positions in October boosted the Dollar, the BoE's hawkish stance and projections of 5% inflation by mid-2027 provided enough support to lift the pair.
The BoE raised its benchmark rate by 25 basis points to 4.00%, its first increase in over three years, with eight members backing the move and one preferring a 50 bps hike.
Yes. Chief Economist Pill said nothing is baked in for next year and rates could stay on hold or even fall if growth stalls, which leans modestly negative for the Pound.
The US added 165,000 jobs in October, well above the 65,000 expected and September's 60,000, and the unemployment rate fell to 4.1% from 4.2%.
Markets raised the probability of a Fed rate hike in December to nearly 79.6% from 72.8% before the jobs report.
The Bank of England raised rates 25 bps to 4.00% with a firmly supportive 8-1 vote and flagged inflation near 5% by mid-2027, which strengthened the Pound more than the stronger-than-expected US jobs report supported the Dollar.
Immediate support sits near 1.3355 and deeper at 1.3225, while resistance is at the 100-day SMA around 1.3395 and then the upper Bollinger band near 1.3485.