GBP/USD backslides in broad-market Greenback rally

GBP/USD fell back below the 1.2900 level as markets pivot into the Greenback.

Looming BoE rate cut provides little support for Cable.

Fed due to deliver another rate cut in lockstep with BoE.

GBP/USD tumbled back below the 1.2900 handle on Wednesday as markets splurged on Greenback bids following the one-sided outcome of the US presidential election. The Bank of England (BoE) and the Federal Reserve (Fed) are both due to deliver matching quarter-point rate cuts on Thursday.

The US presidential election still isn’t over, and some key battlegrounds will take some time before a final call is made. Still, markets are confident that the outcome has been decided, with Republican candidate and former President Donald Trump set to win 276 electoral votes. With the Republicans also set to win back both the US Senate and Congress, investors are anticipating a pro-growth environment with more deregulation as well as additional or extended business tax cuts. 

Despite a steady stream of inflationary rhetoric from former President Donald Trump on the campaign trail, investors are viewing a Trump win as a net positive for markets, piling into risk assets as well as the Greenback during the midweek market session.

The BoE’s latest rate call, slated for Thursday, is expected to deliver another quarter-point cut to investors. The BoE’s Monetary Policy Committee is expected to vote seven-to-two to reduce the BoE’s main reference rate to 4.75% from the current 5.0%.