GBP/USD rises on BoE's upbeat economic outlook for the UK

• The GBP/USD pair rises to 1.2643, boosted by the Bank of England Governor's positive outlook on the British economy and policy changes.
• The BoE's balanced view on inflation and rates boosts optimism, suggesting possible rate cuts amid employment gains.
• The US leading index and the impending FOMC minutes are expected to offer further outlook for GBP/USD in light of global economic adjustments.

The British pound rose against the US dollar in the middle of the North American session, as US traders returned to their offices. Reasons such as Bank of England Governor Andrew Bailey's statement that the British economy could do better than expected, boosted the pair. GBP/USD upward. At the time of writing, the pair is trading at 1.2643, up 0.40% on the day.

GBP/USD advances on positive economic signals from BoE officials eyeing Fed minutes

The United Kingdom's economic calendar was attended by those responsible for the BoE. The BoE's Michael Broadbent said the issue has moved from how tight the policy is to how long it lasts. He added that the most persistent components of inflation “may have peaked,” although he did not rule out an easing of policy at some point.

BoE Governor Andrew Baily commented that the economy is recovering, highlighting that it is at full employment. He added that “we do not need inflation to return to target before cutting rates”, while he noted that he cannot say when the BoE will ease policy.

At the same time, Swati Dhingra, a BoE member who voted in favor of cutting rates, noted that the downside risks to the British economy are considerable due to the tightening of the economy, adding that consumption remains very weak.

A Reuters poll found that the Bank of England would cut the bank rate to 4.75% in the third quarter of 2024, while the British economy is expected to grow 0.3% in 2024 and 1.1% in 2025.

In the United States, the economic agenda remains light, although the US Conference Board is expected to reveal the leading index for January, which is estimated to fall 0.3% month-on-month. On Wednesday, the agenda will pick up pace, with the publication of the latest minutes of the Federal Open Market Committee (FOMC) and Fed spokespersons will give statements.

GBP/USD Price Analysis: Technical Insights

GBP/USD remains range-bound but has approached the 50-day moving average (DMA) at 1.2671, the high of that area, but has pulled back. However, a daily close above the February 19 high at 1.2629 could open the door to further gains. The next resistance would be the 50 DMA and 1.2700. On the contrary, if sellers push the pair below 1.2600, a drop to the 200-DMA at 1.2563 is expected.