The GBP/USD currency pair is experiencing a decline as the market responds to rising sentiment around Donald Trump’s potential victory in the presidential election, with exit polls appearing to favor the Republican candidate. As traders evaluate the political landscape, the focus shifts to upcoming interest rate decisions from both the Federal Reserve and the Bank of England later this week.
Currently trading around 1.2940 during the Asian trading hours, GBP/USD is relinquishing some of its recent gains. This decline is largely attributed to the strengthening of the US Dollar as market participants react to the heightened likelihood of Trump’s electoral success, as indicated by recent polling data. The prediction platforms show Trump leading over Vice President Kamala Harris, reinforcing the dollar’s position.
Polling data reveals a competitive atmosphere in the race, with Trump commanding a notable advantage. For instance, on one prediction market, Trump is leading with a 57% to 43% margin, while another shows him with a more pronounced 60.7% to 39.5% lead. This trend suggests increasing support for Trump as the election date draws near, although the contest remains closely contested.
Preliminary exit polls from Georgia indicate Trump may have secured a lead, holding a ten-point advantage over Harris in this key state. However, this is based on early data from a very small fraction of the total vote count. Conversely, early results from Pennsylvania show Harris with a commanding majority, receiving 71% of the votes counted so far in that state.
As the political landscape develops, traders are also bracing for decisions from major central banks. Analysts anticipate that the Federal Reserve will implement a 25 basis point cut to interest rates during its meeting on Thursday, a move that is expected to reflect the central bank’s response to current economic conditions. Similarly, the Bank of England is predicted to follow suit with its own quarter-point reduction in rates, breaking the current rate of 5% down to 4.75%.
