GBP/USD rose above 1.2700 in quiet Wednesday trading as GBP traders prepare for the Bank of England’s (BoE) upcoming announcement. The BoE is expected to keep interest rates steady at 5.25%, despite disappointing UK economic data. Market volumes were low on Wednesday due to the midweek holiday in the US, but are expected to pick up on Thursday with the release of US Initial Jobless Claims.
The BoE’s Monetary Policy Report will also be released on Thursday, with expectations for the MPC to vote seven-to-two in favor of holding rates. GBP continues to trade higher after hitting a near-term low last week, with resistance at the 200-hour EMA near 1.2725. Daily candles remain above the 50-day EMA at 1.2675, but face a supply zone above 1.2800.
Key factors influencing the value of the Pound Sterling include the BoE’s monetary policy decisions, economic data releases, and the Trade Balance. The BoE adjusts interest rates based on inflation levels to maintain price stability. Strong economic indicators can boost the GBP, while weak data can lead to a decline. Additionally, a positive Trade Balance strengthens the currency, while a negative balance can weaken it.