GBP/USD Focus on Election, Brexit, Bank of England

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GBP price, Brexit news and analysis:

  • Near-term, the results of the US elections will be the principal driver of GBP/USD but traders also need to watch out for developments in the post-Brexit trade talks and on Thursday’s meeting of the Bank of England’s monetary policy committee.
  • Reports suggest that progress is being made in the EU-UK talks, while the BoE will likely increase its bond-buying program.

GBP/USD at the mercy of the US electorate

GBP/USD trading will be dominated short-term by the response of the US Dollar to the US elections but domestic UK factors could be increasingly important as the week progresses.

In particular, the EU-UK talks on their relationship once the Brexit transition period ends on December 31 could at last be making progress, with reports suggesting there could be a breakthrough on the contentious subject of fishing. The US-UK talks are also reported to be making progress and both these developments are potentially positive for GBP/USD after its recent decline.

GBP/USD Price Chart, One-Hour Timeframe (October 20 – November 3, 2020)

Chart by IG (You can click on it for a larger image)

GBP Forecast

GBP Forecast

Recommended by Martin Essex, MSTA

Download our Q4 GBP forecast

This week’s meeting of the Bank of England’s monetary policy committee is expected to end Thursday with a decision to increase the BoE’s bond-buying program by around £100 billion, taking the total to £825 billion – a potential negative for GBP/USD.

However, if such a decision is reached it could be seen as a clear and timely response to the UK national lockdown due to begin this week and could therefore be welcomed by the markets, helping GBP/USD recover some of the ground lost in recent days and bring the 1.30 level back in sight.

How will the markets react to the US elections? You can find out here

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily 5% -4% 0%
Weekly -10% -11% -10%

We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

— Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

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