GBP/USD Rises as Traders Scale Back Aggressive BoE Easing Bets

The British pound rose to $1.2440, rebounding from a three-week low as traders adjusted rate cut expectations after BoE policymaker Catherine Mann’s comments. Although she voted for a 50bps cut, she clarified it wasn’t a signal for aggressive easing but aimed to improve market communication. She emphasized the need to maintain monetary restrictions due to structural challenges in returning inflation to 2%, leading traders to lower 2025 rate cut expectations to 62bps. Focus now shifts to upcoming GDP estimates, Q4 figures, and December’s industrial and manufacturing output.

The first resistance level for the pair will be 1.2500. In the event of this level's breach, the next levels to watch would be 1.2600 and 1.2650. On the downside 1.2340 will be the first support level. 1.2265 and 1.2100 are the next levels to monitor if the first support level is breached.