Near seven-week high: British Pound as US elections weigh on USD, BoE decision looms

1.3503 marks a seven-week high for GBP/USD before a pullback below 1.35.
Election results favouring Democrats weigh on the US Dollar.
Ahead of Friday’s US Nonfarm Payrolls, markets fully price in a BoE rate hike.

Pound Sterling reaches a seven-week high against the Greenback on Wednesday. The rally follows the US midterm elections, with Democrats poised to take both the US House of Representatives and the US Senate. The outcome deals a heavy blow to US President Trump, who congratulated the Democrats and signalled a willingness to negotiate with them. Trading near 1.3500, GBP/USD is up 0.55%.

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

1.3500 in focus for GBP/USD as US election results hit USD; BoE next

A decline of over 0.47% took the US Dollar Index (DXY) to 101.41 after polls indicated that US voters wanted Democrats to act as a counterweight to the White House. The index measures the US currency against six peers. US Treasury yields also fell, while US equities gained. Some analysts observed that markets performed better when no single party could pass legislation using a party-line majority.

Talks on the US-Iran conflict continued despite Iran reporting the destruction of a US drone. Citing unnamed sources, CCTV reported that a senior Iranian official said Tehran remained far from an agreement with the US to end the conflict.

Oil prices nevertheless slipped as market participants speculated that Washington and Tehran could reach an agreement in the near term.

At 54.5, the October ISM Services Purchasing Managers’ Index (PMI) undershot the 54.8 forecast and the previous month’s 54.9 reading. The US survey’s employment component increased. New orders and prices paid declined, although both stayed in expansionary territory.

An earlier release, October’s ADP Employment Change, indicated steady private-sector hiring. Companies added 86K workers, beating expectations of 69K.

Thursday’s Bank of England policy decision is the focus in the UK. According to Prime Terminal, money markets had assigned a 100% probability to a rate hike, while pricing a 26% chance of a further Bank Rate increase at the December meeting.

Thursday’s US calendar includes Initial Jobless Claims for the week ending 31 October and speeches from Fed officials. Attention then turns to Friday’s Nonfarm Payrolls report. Analysts expect the US economy to add 65K people to the workforce.

GBP/USD Price Forecast: 1.3465 holds a bullish near-term bias

Chart Analysis GBP/USD — GBP/USD: daily price chart

At 1.3465 on the daily chart, GBP/USD retains a bullish near-term bias. Spot remains above the latest simple moving average at 1.3368 and the reclaimed downward resistance trend line break at 1.3384. The earlier bearish break level of 1.3239 also sits below the pair and now provides underlying demand. With the Relative Strength Index (14) at 63, positive momentum remains firm without yet reaching extreme levels, supporting the constructive outlook.

Initial downside support lies near the current price of 1.3465. Below that are the former downward trend line break around 1.3384 and the simple moving average cluster at 1.3368. Deeper structural demand sits near 1.3239, at the old resistance break. For buyers, the first upside hurdle is the upward-sloping support trend line break around 1.3676. The second rising trend line break near 1.3849 presents a higher barrier; a rejection there would suggest a pause in the ongoing advance.

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

1.07% against JPY: Pound Sterling Performance This Week

This week, the Japanese Yen was the currency against which the British Pound performed most strongly. The table below sets out the percentage changes in the British Pound (GBP) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.70%	-0.56%	0.68%	-0.02%	0.34%	0.20%	-0.71%
EUR	0.70%		0.11%	1.34%	0.67%	0.96%	0.88%	-0.03%
GBP	0.56%	-0.11%		1.07%	0.56%	0.84%	0.77%	-0.14%
JPY	-0.68%	-1.34%	-1.07%		-0.66%	-0.34%	-0.54%	-1.47%
CAD	0.02%	-0.67%	-0.56%	0.66%		0.33%	0.12%	-0.70%
AUD	-0.34%	-0.96%	-0.84%	0.34%	-0.33%		-0.07%	-0.98%
NZD	-0.20%	-0.88%	-0.77%	0.54%	-0.12%	0.07%		-0.97%
CHF	0.71%	0.03%	0.14%	1.47%	0.70%	0.98%	0.97%

Percentage movements between major currencies are displayed in the heat map. Select the base currency from the left-hand column and the quote currency from the top row. For example, selecting the British Pound on the left and reading across to the US Dollar gives the percentage change for GBP (base)/USD (quote) in the intersecting cell.