Photo by Colin Watts on Unsplash 
 

GBP/USD cycled around the 1.3200 level on Tuesday as Cable traders keep their heads down during the long wait for further signs of interest rate cuts from both the Federal Reserve (Fed) and the Bank of England (BoE) heading into the final weeks of 2025.

Markets are expecting a tilt toward further interest rate cuts from both the Fed and the BoE in December. The Fed’s next rate call is slated for December 10, with the BoE trailing along on December 18.

Fed and BoE expected to deliver further rate cuts
 

The Fed is now in its statement blackout period ahead of its upcoming interest rate decision to round out the trading year. Investors broadly expect a third straight interest rate trim this month, but a notable lack of consistency in monetary policy statements from key Fed officials has widened the spread of outcomes considerably. Markets are overwhelmingly convinced that further interest rate moves lower are on the horizon, but rate bets remain spread across December, January, or possibly March.

The BoE is likewise expected to deliver another interest rate cut in December. UK economic conditions have not improved since the last rate call by the UK’s central bank, and the last rate meeting resulted in a 5-to-4 vote to keep rates steady, with four BoE policymakers voting in favor of a quarter-point rate trim.

Policy statement divergence is practically a rite of passage for BoE policymakers, whereas matching the tone and pace of the Fed’s Chair was, up until recently, a performative solution for most Fed officials.

Up next: US ADP jobs figures
 

ADP Employment Change figures for November are due on Wednesday, and are expected to shrink sharply to just 5K net job additions for the month compared to the previous print of 42K. ADP jobs numbers have a tenuous-at-best relationship with actual numbers, but with US data agencies still scrambling to play catchup on data collection and measurement following the longest government closure in history, market participants and Fed officials are stuck relying on second-best data sources in the interim.

GBP/USD daily chart
 

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