The GBP/USD currency pair has experienced a slight uptick, reaching 1.2550, amidst low trading volumes this week, owing to the forthcoming Christmas holidays. The market is in a consolidation phase, with minimal movement, as it adapts to the quieter holiday atmosphere. Similarly, the US Dollar Index (DXY) remains steady, just above the 108.00 mark, as it shows negligible changes while traders wait for more economic data.
On Tuesday, the British Pound (GBP) saw gains against its major counterparts. Investors appear to be shrugging off a slight increase in expectations for a dovish approach from the Bank of England (BoE) in the coming year. Market predictions now point to a 53-basis points interest rate cut in 2025, an increase from the 46 bps anticipated following the BoE’s policy announcement last Thursday.
During the Asian session on Tuesday, the GBP/USD pair continued to hover within a range just below the mid-1.2500s, staying close to the low levels it touched the previous week—the lowest since May. The overall fundamentals and technical indicators suggest that the currency pair is more likely to face downward pressure in the near term.
