Fundamental Market Analysis for November 4, 2026 GBPUSD
Event to watch today:
17:00 EET. USD - ISM Services Business Activity Index
GBPUSD:
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For the pound, the key domestic factor remains tomorrow's Bank of England meeting. Economists expect a rate hike from 3.75% to 4.00% amid inflationary pressures. This is currently a forecast, not an adopted decision. Nevertheless, the expectation of higher yields on British assets helps the currency maintain investor interest ahead of the meeting results announcement.
UK inflation at 3.5% is combined with an economy that has proven more resilient than expected and signs of labor market stabilization. This backdrop increases the likelihood of policy tightening. At the same time, the market already prices in several subsequent rate hikes, while some economists allow for only a limited move. A cautious signal from the regulator could quickly diminish the pound's advantage.
Today, the dollar's weakness following the initial results of the US elections strengthens the UK's interest rate argument. The main risk to this combination is a strong US Services ISM report, especially if high price pressures persist: such a report could raise expectations for Fed rate hikes. Before its publication, the base scenario for GBPUSD assumes growth as long as current demand for the pound holds.
Trading idea: BUY 1.3465, SL 1.3430, TP 1.3535
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