GBP/USD has a trendline support level of around 1.2570, DBS’ Senior FX Strategist Philip Wee notes.

Bailey to reaffirm BoE’s gradual approach on policy

“Appearing before the Parliament’s Treasury Committee on November 19, Bank of England Governor Andrew Bailey and his colleagues will likely reaffirm their gradual approach to removing monetary policy restraint. Having lowered the bank rate by 25 bps in August and November, the OIS sees quarterly rate cuts to 4.25% by mid-2025.”

“Following the Chancellor’s budget announcement on October 31, the BOE forecasted inflation rising and staying above the 2% target until 2027, based on its assumption for rates to decline to 3.7% by 4Q25.”

“On November 20, UK CPI inflation should rebound to 2.2% YoY (0.5% MoM) in October from 1.7% YoY (0% MoM) in September. While CPI core inflation is expected to moderate to 3.1% YoY from 3.2%, it remains above the 2% target.”