British Pound (GBP) Price Outlook: Steady Ahead of BoE, UK Elections
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GBP price, news and analysis:
- GBP/USD will likely trade sideways around the 1.39 level ahead of Thursday’s monetary policy decision by the Bank of England.
- UK local, regional and mayoral elections take place the same day but the results are not likely to emerge until later.
GBP/USD to trade sideways near-term
GBP/USD and the GBP crosses are expected to trade sideways this week, with GBP/USD staying close to the 1.39 level ahead of Thursday’s meeting of the Bank of England’s monetary policy committee. Given the UK economic recovery after the pandemic-induced slump, traders will be watching out for any decision by the MPC on tapering its huge economic stimulus measures.
That would be positive for GBP but traders will also be watching out for the results of UK local, regional and mayoral elections the same day, although the results will take time to trickle out. In particular, an overall majority for the pro-independence Scottish National Party could weaken the Pound as it would raise the chances of Scotland breaking away from the UK, although not for a long time.
GBP/USD Price Chart, Daily Timeframe (November 23, 2020 – May 4, 2021)
Source: IG (You can click on it for a larger image)
Also worth keeping an eye open for will be the result of a by-election in Hartlepool, where the Conservatives are challenging for the seat currently held by Labour. A Conservative win would likely be positive for GBP as the markets generally prefer the Tories and could, combined with any news on tapering, lift GBP/USD back above the 1.40 mark.
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.