British Pound begins BoE policy week on a positive note

Gains against major peers lift the British Pound as investors await Thursday’s BoE policy decision.
A 25 bps increase in interest rates to 4% is widely expected from the BoE.
According to market expectations, the Democrats have a 70-72% chance of winning both the House and the Senate.

Gains against most major currencies mark the start of the week for the British Pound (GBP), which is trading near 1.3430 against the US Dollar (USD), up 0.3%. Sterling’s advance comes as investors turn their attention to Thursday’s monetary policy announcement from the Bank of England (BoE).

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

How Is Pound Sterling Performing Today?

Against the major currencies listed below, today’s percentage movements in the British Pound (GBP) are set out in the table. The Australian Dollar was the currency against which the British Pound recorded its strongest performance.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.49%	-0.27%	0.05%	-0.08%	0.10%	-0.02%	-0.58%
EUR	0.49%		0.22%	0.51%	0.40%	0.59%	0.47%	-0.06%
GBP	0.27%	-0.22%		0.32%	0.18%	0.37%	0.25%	-0.27%
JPY	-0.05%	-0.51%	-0.32%		-0.11%	0.06%	-0.06%	-0.61%
CAD	0.08%	-0.40%	-0.18%	0.11%		0.19%	0.06%	-0.46%
AUD	-0.10%	-0.59%	-0.37%	-0.06%	-0.19%		-0.12%	-0.65%
NZD	0.02%	-0.47%	-0.25%	0.06%	-0.06%	0.12%		-0.52%
CHF	0.58%	0.06%	0.27%	0.61%	0.46%	0.65%	0.52%

Percentage movements between major currencies are illustrated in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read GBP (base)/USD (quote), for instance, choose the British Pound on the left and follow that row across to the US Dollar; the corresponding cell gives the pair’s percentage change.

Can Sterling stay firm as markets treat a BoE hike to 4.00% as certain?

Market conviction that high energy costs leave the BoE with “no alternative but to hike rates on Thursday” is underpinning Sterling, according to ING analysts, who describe the currency as “trading reasonably well,” ahead of the decision. Their assessment that “a 25bp rate hike to 4.00% looks like a done deal,” adds to the positive sentiment towards the Pound.

Given financial markets’ confidence in a BoE rate increase, the voting split and the outlook for monetary policy might attract particular scrutiny from investors.

Selling pressure is weighing on the US Dollar as Tuesday’s United States (US) midterm elections approach. At the time of writing, the US Dollar Index (DXY) is near 101.65, down 0.3%; the index measures the Greenback against a basket of six major currencies.

Could a Democrat sweep in the US midterms weigh on the Dollar?

For currency markets this week, the principal event risk is the US midterm elections, according to ING’s Chris Turner. He points to betting markets assigning the Democrats a “70-72% chance of taking both the House and the Senate.” On the potential currency impact, he argues that “one could make the case that the Dollar should come lower on such an outcome,” explaining that a Democrat clean sweep would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year and could encourage President Trump to pursue an even more activist foreign policy agenda.” Turner suggests that investors will weigh these political risks against factors that continue to support the Dollar and DXY around the 102.00 area: robust US growth, inflation above target and continued Fed tightening.

GBP/USD Technical Analysis: Can the Bullish Bias Hold?

A positive near-term bias remains in place for GBP/USD on the daily chart, with the pair trading around 1.3430. Spot remains above both the 9-day Exponential Moving Average (EMA) at 1.3366 and 1.3408, the 50.0% Fibonacci retracement of the 1.3138–1.3677 move. At nearly 60, the Relative Strength Index (14) signals solid positive momentum without reaching overbought territory, lending further support to the bullish tone.

The first upside hurdle is 1.3471, the 61.8% Fibonacci retracement, followed by 1.3562 at the 78.6% level. Should buyers extend the rally, the cycle peak of 1.3677 would present a more substantial obstacle. Below current prices, the 50.0% retracement at 1.3408 offers initial support, with the 9-day EMA at 1.3366 and the 38.2% level at 1.3344 next in line. A larger decline would bring the 23.6% retracement at 1.3265 and the structural reference point near 1.3138 into focus.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Data in Focus

How Does the BoE Interest Rate Decision Affect Sterling?

At the conclusion of each of its eight scheduled annual meetings, the Bank of England (BoE) publishes its interest rate decision. A rate increase accompanied by a hawkish assessment of the economy’s inflation outlook is generally positive for Pound Sterling (GBP). Conversely, a dovish assessment of the UK economy, together with a decision to hold rates steady or lower them, is generally viewed as negative for GBP.

Upcoming release: Thu 5 November 2026 12:00

Release frequency: No fixed schedule

Market consensus: -

Prior reading: 3.75%

Data source: Bank of England