GBP/USD near seven-week high as US midterms weaken dollar
ITF Team2 min read
GBP/USD climbs to around 1.3500, up 0.55%, after US midterm results favor Democrats, pushing the dollar index to 101.41 and setting the stage for a BoE decision.
Key takeaways
- GBP/USD rose to about 1.3500 on 4 Nov 2026, gaining 0.55%.
- The US Dollar Index fell to 101.41, down nearly 0.50%, after midterm polls favored Democrats.
- BoE rate‑hike odds for the Thursday meeting are priced at 100%, while December odds sit at 26%.
- US ISM Services PMI for October came in at 54.5, below expectations of 54.8.
The British pound surged to a seven‑week peak against the US dollar on 4 Nov 2026, trading around 1.3500 – a 0.55% rise – after early US midterm results indicated Democratic control of both the House and the Senate. The shift weakened the greenback, pulling the US Dollar Index (DXY) down to 101.41, and set the stage for the Bank of England’s policy meeting the following day.
Midterm results trigger dollar weakness and broader market moves
Polls showing a Democratic majority in Congress lowered expectations of a unified legislative push, prompting the DXY to slip by almost half a percent. US Treasury yields eased across the curve, and equity markets rallied, reflecting analysts’ view that a divided government can reduce policy uncertainty. In parallel, oil prices drifted lower on speculation that Washington and Tehran might reach a near‑term settlement, despite Iran’s claim of downing a US drone.
The softer US data also contributed to the dollar’s retreat. The ISM Services PMI for October fell to 54.5 from 54.9, missing the 54.8 forecast, while the ADP employment report showed private hiring adding 86 K jobs, well above the 69 K estimate. These figures suggest a modest slowdown in services activity but continued labor market strength, tempering expectations of aggressive Fed tightening.
Technical picture of GBP/USD
On the daily chart GBP/USD sat at 1.3465, comfortably above the 20‑day simple moving average (1.3368) and the reclaimed downward‑trend resistance at 1.3384. The pair also sits above the former bearish break at 1.3239, turning that level into a zone of underlying demand. Momentum remains solid, with the 14‑period RSI at 63, indicating firm but not over‑extended bullish pressure.
Support lies near the current price, followed by the 1.3384 trend‑line break and the SMA cluster at 1.3368. On the upside, the next resistance is the upward‑sloping support break around 1.3676, with a higher ceiling at 1.3849. A break above these levels could signal a pause in the rally, while a fall back through 1.3368 would test the broader demand zone.
Read also: Silver price rallies to $52 as US dollar weakens and yields fall
What traders should watch next
All eyes turn to the Bank of England’s meeting on Thursday. Money markets price a 100% probability of a rate hike at that session, though the odds of another increase in December are only 26% according to Prime Terminal. On the US side, upcoming data includes initial jobless claims for the week ending 31 Oct and Fed officials’ speeches on Thursday, followed by the Non‑Farm Payrolls report on Friday, where economists expect an addition of 65 K jobs.
- US DXY at 101.41 (down ~0.5%)
- GBP/USD near 1.3500 (+0.55%)
- BoE hike odds Thursday: 100%
- December BoE hike odds: 26%
- ISM Services PMI Oct: 54.5
Frequently asked questions
Why did the pound rise after the US midterm elections?
The early midterm results showing Democratic control reduced expectations of a unified legislative agenda, which weakened the US dollar. The DXY fell to 101.41, and lower Treasury yields made the dollar less attractive, allowing GBP/USD to climb to around 1.3500.
What technical levels are important for GBP/USD right now?
Key support sits at the current price around 1.3465, then 1.3384 and the 20‑day SMA at 1.3368. Resistance lies at the upward‑sloping trend‑line break near 1.3676, with a higher barrier at 1.3849.
What is the market’s expectation for the Bank of England’s upcoming decision?
Money markets price a 100% chance of a rate hike at Thursday’s meeting, while the probability of another increase in December is estimated at 26% by Prime Terminal.
Official data sources
Related news
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- Democrats midterm victory drives dollar slide and gold rally in market overview
- GBP/JPY hits fresh two-month high ahead of BoE decision
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This article is compiled from international market news for information only. It is not investment advice.