Pound falls against the US dollar as Trump wins North Carolina and leads in other swing states.

Pound Sterling (GBP) fell to around 1.2850 against the US Dollar (USD) during early London trading hours on Wednesday. The GBPUSD pair experiencing a sharp sell-off as speculators rush to the so-called ‘Trump trades’ following multiple exit polls showing Republican candidate Donald Trump with a clear lead over Democratic competitor Kamala Harris in the US presidential election.

Trump’s triumph could have a huge impact on the UK’s economic growth.

According to the Associated Press, Trump has been announce as the winner in a key swing state North Carolina also leads the other six swing states: Pennsylvania, Michigan, Georgia, Arizona, Nevada, and Wisconsin.

The impact of Trump topping electoral polls is plainly seen in risk-sensitive currencies, which fallen considerably versus the US dollar. Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, reaches a new four-month high of roughly 105.30.

Risk-perceived currencies have suffered as investors anticipate increased import tariffs under Trump’s administration, which have a big impact on exports from the United States (US) and its close trading partners. Trump also promise to cut business taxes if he wins, allowing the Federal Reserve (Fed) to retain hawkish interest rate guidance.

Moreover Aside from the US presidential election, investors will focus on the The Fed’s monetary policy meeting slated for Thursday. The Fed largely expected to lower interest rates by 25 basis points (bps) to 4.50%-4.75%. As a result, investors will pay particular attention to the Fed’s statement on interest rate guidance.

Daily market movers: Pound Sterling shelved ahead of the BoE meeting.

Except for the US Dollar, the Pound Sterling performed middling against its key counterparts on Wednesday. The British pound projected to trade sideways, with investors eyeing the Bank of England’s (BoE) interest rate decision, which will be reveale on Thursday. The BoE is anticipated to decrease interest rates by 25 basis points to 4.75%. This would be the second interest rate reduction this year. The BoE began its policy easing cycle with a On August 1, the customary rate drop of 25 basis points occurs.

Moreover Market participants estimate a 7-0 vote split on the BoE rate drop decision, with the other two Monetary Policy Committee (MPC) members expected to support keeping interest rates constant at current levels.

Investors will closely follow BoE Governor Andrew Bailey’s press conference to learn about the impact of the United Kingdom (UK) budget for FY2025.

Investors will closely follow BoE Governor Andrew Bailey’s press conference to learn about the impact of the United Kingdom (UK) budget for FY2025 on the inflation outlook and monetary policy action in December. There would also be concerns about the impact of Trump’s triumph on the UK economy, if he wins or continues in the lead by then.

Furthermore According to academics at the National Institute of Economic and Social Research (NIESR), the UK’s economic growth would only be 0.4%.if Trump’s tariff proposals adopted. Even without Trump’s tariffs, the agency expects GDP growth to decline to 1.2% next year and 1.1% in 2026, according to Reuters.