The most recent economic data indicates that the British economy is teetering on the edge of a recession, and members of the Bank of England may soon vote in favor of reducing interest rates. While the Bank of England is expected to maintain stable interest rates for an extended period, awaiting sufficient evidence to support multiple rate cuts, when these reductions do commence, they might be more significant than what the market anticipates. Current market expectations fall short of estimating the extent of rate cuts over the next two years, currently standing at just 85 basis points.
As observed on the H4 chart, the GBP/USD currency pair is declining after a brief recovery. Geopolitical uncertainties are prompting investors to seek refuge in the US dollar due to its attractive swap rates, which are bolstering the USD's position. Meanwhile, market attention is focused on the 1.2000 threshold, and a breach of this level could potentially pave the way for the exchange rate to regress to 1.1850.
As observed on the H4 chart, the GBP/USD currency pair is declining after a brief recovery. Geopolitical uncertainties are prompting investors to seek refuge in the US dollar due to its attractive swap rates, which are bolstering the USD's position. Meanwhile, market attention is focused on the 1.2000 threshold, and a breach of this level could potentially pave the way for the exchange rate to regress to 1.1850.
