The Pound Sterling (GBP) has reached a new two-and-a-half-year high against the US Dollar (USD), supported by a weaker USD and growing expectations for further Fed rate cuts.  

Fed Rate Expectations

The Federal Reserve (Fed) is expected to cut interest rates by 50 basis points (bps) in November, according to the CME Fedwatch tool. This expectation has increased following recent comments from Fed officials.

UK Economic Data

The UK S&P Global PMI data for September came in slightly lower than expected, indicating a slowdown in economic activity. However, the overall outlook remains positive.  

BoE Monetary Policy

The Bank of England (BoE) is expected to maintain a gradual approach to interest rate cuts. The BoE’s recent decision to leave rates unchanged was influenced by persistent inflation pressures.

GBP/USD Technical Analysis

The GBP/USD pair has broken above the 20-day Exponential Moving Average (EMA), indicating a bullish trend. The 14-day Relative Strength Index (RSI) is above 60.00, suggesting strong bullish momentum.