The GBP/USD pair continued its downward trend on Thursday, trading around 1.2950 during the Asian session. This decline is largely attributed to the robust performance of the US Dollar (USD), as market caution prevails ahead of the upcoming US presidential election.
As the November 5 election approaches, former President Donald Trump has made notable gains among Hispanic male voters, while Vice President Kamala Harris has seen increased support among white women. The latest poll, conducted between October 16 and 21, indicates a tightly contested race, with Harris leading slightly at 46% compared to Trump’s 43%.
Traders are closely monitoring key US economic indicators, including the PCE inflation data set to be released on Thursday and the Nonfarm Payrolls (NFP) report on Friday. On Wednesday, the Greenback faced challenges despite a report showing the US Gross Domestic Product (GDP) expanded at an annualized rate of 2.8% in the third quarter, falling short of the 3.0% growth recorded in the previous quarter and market expectations. However, the ADP Employment Change report revealed an increase of 233,000 jobs in October, the largest gain since July 2023.
The Pound Sterling (GBP) experienced additional pressure following the unveiling of the UK’s new Labour government’s first budget on Wednesday. The budget proposes £40 billion in tax increases aimed at addressing public finance deficits and bolstering public services. A key component of the budget is an increase in National Insurance contributions, which are taxes on earnings paid by employers.
Market participants are also keenly awaiting a keynote speech by Bank of England (BoE) Deputy Governor Sarah Breeden, scheduled to take place at a joint conference hosted by the Hong Kong Monetary Authority and the Bank for International Settlements. The conference will focus on “Opportunities and Challenges of Emerging Technologies in the Financial Ecosystem.”
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