GBP/USD price analysis: pound rises above 1.31 as US dollar weakens
GBP/USD has surged past 1.31 for the first time in a year, reflecting positive sentiment towards the British Pound. Upcoming speeches by central bank leaders could further impact GBP/USD trading.
Key points
- GBP/USD hit a new yearlong high above 1.31 after trading higher for 6 consecutive days
- FOMC minutes suggest a potential rate cut in September; further insights expected from Fed Chair Powell's Jackson Hole speech
- Bank of England Governor Bailey's speech on Friday could similarly influence GBP prices
- GBP/USD has historically traded much higher, reaching 1.40 in 2021
GBP/USD hits new high above $1.31
GBP/USD traded higher for the 6th day in a row, hitting a new yearlong high above 1.31 intraday on Wednesday. The pair has appreciated over 2.3% in the past week, trading as low as 1.2780 last week. This consistent upward movement reflects a part of the larger dollar weakness storyline as markets anticipate a heavy slate of rate cuts from the Fed this fall.GBP/USD price history
US dollar weakens following growing rate cut expectations
Dovish FOMC minutes revealed a consensus to cut rates in September if economic data continues to support this move. Investors are eagerly awaiting insights from Fed Chair Jerome Powell’s Jackson Hole speech on Friday, which could provide further direction. The weakened US dollar often leads to a stronger GBP/USD pair, showcasing the intricate relationships between monetary policies and forex prices.BoE Governor Bailey could shift pound sentiment
While the pound has been a landing place for some of the recent US dollar bearishness, this dynamic can change at any moment as the UK continues cutting rates as well. Governor Bailey of the Bank of England is set to speak on Friday as well, whose comments may signal the timing around future rate cuts in the UK. A surprising dovish tone from Governor Bailey could prompt bearish pound sentiment just as the FOMC minutes has impacted dollar prices this week.Where next for GBP/USD?
Currently, 1.31 marks a multi-year high for GBP/USD, although it has traded much higher historically, such as hitting 1.40 in 2021. Historical price levels provide context for potential future movements, helping traders set realistic targets and risk management strategies. By analyzing past performance alongside current economic indicators, it can be better predicted where the GBP/USD might head next, making more informed trading decisions.How to trade GBP/USD
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- Choose your forex trading platform
- Open, monitor, and close positions on GBP/USD
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