GBP retreats from the high. Overview for 01.12.2023

The British pound sterling has stepped back from the three-month peak against the US dollar and continues its decline. The current GBPUSD exchange rate stands at 1.2643.

The instrument rose to 1.2730 on 29 November but is now compelled to decline due to the stabilisation of the US dollar.

Despite this movement, the pound, paired with the US dollar, experienced a 4% increase in November, marking its best monthly result for 2023. The optimism about GBP was partly based on the expectation that by June, the Bank of England would gather strength and lower the interest rate for the first time in this cycle. This contrasts with the market-wide outlook for the Fed and mid-spring.

Meanwhile, the monetary policymakers at the Bank of England maintain a relatively hawkish stance. For example, BoE Governor Andrew Bailey mentioned this week that the regulator was ready to take any necessary actions to bring inflation down to the target level of 2%.