GBP/USD Weekly Outlook

The GBP/USD has had another week of chaotic results in the last five days of trading, and it's likely that the currency pair isn't done yet.

The GBP/USD reached a high of nearly 1.14950 on October 4 and 5. Some traders may believe this has a lot to do with the Tory government's "turnaround" under Liz Truss, but they may be mistaken. When the United Kingdom's proposed tax policy received widespread criticism, the government effectively abandoned it. Prime Minister Liz Truss changed her mind about what she said she believed in just a few days. Many financial institutions were not pleased.

The GBP/USD will be around 1.10900 at the start of trading this week. Prior to last week's weekend, the GBP/USD was almost calmly trading near the 1.12100 ratio. Then came the US jobs report, which was better than expected, which shifted the markets once more.

Poor leadership and ambiguous interest rates are causing havoc.

Not only did the UK government change its stated economic policy early last week, but financial institutions also began to believe that the US Federal Reserve would begin to soften its talk about interest rates. This increased the value of the GBP/USD. Early last week, global stock market indices rose, and there were some signs of optimism. However, comments made by US Fed officials at the end of the week, as well as better-than-expected job data, pushed the USD higher on Friday.

The idea that inflation will suddenly fall by a large amount has been "harmed" by the fact that the price of crude oil rose last week and is now trading for more than $90.00 USD.

People are getting used to the idea that the Federal Reserve of the United States will raise interest rates by 0.75 percent in November.

Inflation remains a problem, and the rise in crude oil prices is a problem for the GBP/USD exchange rate.

While reading this article, technical traders may want to scream, but there is one more major issue: inflation. Inflation will have a long-term impact on the economies of the United Kingdom and the rest of the world.

For nearly 8 trading days, the price of crude oil has been rising. When inflation is high, interest rates rise. The GBP/USD did reach September 21 levels at the start of last week, but the rise was met with a lot of selling because fundamentals were making financial houses nervous.

The upcoming trading week appears to be more volatile in terms of how people feel. Only before the weekend did the GBP/USD exchange rate fall.

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