GBP/USD Goes Back to School… at 1.23
Yesterday, the British pound tried a bit of high‑stakes theatre. It hit a bright spot—its most bullish reading in two weeks at 1.2288—but then, like a stubborn kid refusing to leave the playground, it stalled just shy of the 1.2300 resistance. Two days in a row, the pair’s price has been taking a downhill slide.
Right now, it’s tumbling to about 1.2082, a dip of roughly 0.35% in Thursday trading. The money‑market community is feeling the squeeze of risk‑aversity, nudging a lot of investors to squeeze their dollar boxes.
Why the Pound is Running Away
- Geopolitical drama – PM Benjamin Netanyahu’s army is pre‑pping for a ground assault, and he’s puffed up with secrecy. “We’ll show up when everyone’s in agreement,” he said. The drama’s got investors throwing cold showers on the pound.
- U.S. data dancing – New home sales jumped 12.3% in September after a just‑last‑month slump of –8.2%. The U.S. market is sprouting money, which perks up the dollar, relegating the GBP.
- Manufacturing still in the red – The U.S. Manufacturing PMI remains in recession territory. Even though the labor market is doing a little shim‑shim, it’s still show‑minded that the Fed’s tightening won’t cool off the dollar’s climbing.
What To Watch Next
If the U.S. GDP comes in hotter than U.S. economists expected, the pound could shy away even further—potentially off 1.20203—as the dollar bills its version of an award.
Following a slow‑rise in wages in the UK (still lofty but not as high‑flying as last month), the Bank of England might be keeping its flat‑rate card at 5.25% for good until the next November meeting. The unemployment rate stuck at 4.2% (slightly climbing from 4.3%) keeps the narrative of a tightening policy going strong.
So, the consensus in the market is a bearish trend for the GBP/USD pair. A bright‑spot comeback would probably need weaker U.S. economic releases or a surprise drop in inflation to give the buffer its moment.
