GBP/USD Weekly Outlook

In the last five trading days, the GBP/USD currency pair experienced another week of erratic outcomes, and it's likely that this trend will continue.

The GBP/USD exchange rate peaked on October 4 and 5 at over 1.14950. Some traders might believe Liz Truss' "turnaround" of the Tory administration has a lot to do with this, but they may be mistaken. The U.K. government essentially gave up on their proposed tax scheme after receiving a lot of negative criticism. Prime Minister Liz Truss retracted her previous statements about her beliefs in just a few days. Many financial firms were unhappy about this.

This week's trading will begin with the GBP/USD at about 1.10900. The GBP/USD exchange rate was moving virtually peacefully close to 1.12100 before last week's long weekend. When the better-than-expected U.S. jobs report was released later, the markets once more changed direction.

Uncertain interest rates and poor leadership are causing chaos.

Early last week, financial institutions began to speculate that the U.S. Federal Reserve would begin to tone down its rhetoric regarding interest rates, in addition to the U.K. government changing its declared economic stance. The GBP/USD rose as a result. Global stock market indices rose at the beginning of last week, and there were some encouraging signals. The USD, however, gained strength on Friday as a result of remarks made by US Fed members at the close of the week and better-than-expected jobs statistics.

The fact that the price of crude oil increased last week and is once more trading for above $90.00 USD "damaged" the notion that inflation will abruptly reduce by a significant amount.

It is becoming common knowledge that the U.S. Federal Reserve will increase interest rates by 0.75 percent in November.

Inflation is still a problem, and the increase in the price of crude oil is bad for the GBP/USD exchange rate.

While reading this post, technical traders may want to scream, but there is still one more significant issue: inflation. It won't be easy to get rid of the impact of inflation on the economies of the UK and the rest of the world.

Crude oil has increased in price for almost 8 trading days now. Interest rates rise in times of strong inflation. At the start of last week, the GBP/USD did rise to levels last seen on September 21, but the increase was accompanied by a lot of selling since fundamentals were unsettling financial institutions.

It appears that people's emotions will be more erratic over the upcoming trade week. Prior to the weekend, only the GBP/USD exchange rates decreased.

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