GBP/USD depreciates as Trump trade rallies on exit polls favoring the Republican candidate

• GBP/USD loses ground due to increased Trump trade after coming exit polls in favor of the Republican Party.
• The prediction platforms indicate former President Donald Trump currently holds an edge over Vice President Kamala Harris.
• Traders will turn their attention to the interest rate decisions from both the Federal Reserve and the Bank of England on Thursday.

GBP/USD offers its recent gains registered in the previous session, trading around 1.2940 during the Asian hours on Wednesday. The pair depreciates as the US Dollar (USD) gains momentum on strengthening Trump trades as the voting favored Republican candidate Donald Trump in the US presidential election.

Polling data indicate a close race between Donald Trump and Kamala Harris, with Trump currently holding an edge. On Kalshi, Trump shows a strong 57% to 43% lead over Harris, while on Polymarket, the gap is slightly wider, with Trump at 60.7% and Harris at 39.5%. These figures reflect growing support for Trump as election day approaches, but the race remains competitive.

Early exit polls in Georgia, one of the first states with available data, indicate a tilt toward Republican presidential candidate Donald Trump. With 16 electoral votes at stake, preliminary results suggest Trump has about a 10% lead over Democratic candidate Kamala Harris, although this estimate is based on less than 1% of votes counted, according to The Washington Post.

Preliminary results from the Pennsylvania exit polls show a lead for Harris, according to CBC News. With approximately 8% of the expected votes counted, Kamala has secured a 71% majority. The state has 19 electoral votes at stake.

Follow our live coverage: Trump or Harris? Who will be the 47th President of the US and how will markets react?

Traders are closely watching the Federal Reserve's interest rate decision set for Thursday, with a widespread expectation of a 25 basis point cut. The CME FedWatch Tool shows a 96.4% probability of a quarter-point rate reduction at the Fed's November meeting, reflecting strong market anticipation of a modest cut.

On the GBP front, the Bank of England's (BoE) upcoming rate decision, also scheduled for Thursday, is expected to result in another quarter-point reduction. The BoE's Monetary Policy Committee is anticipated to vote 7-2 in favor of lowering the main reference rate to 4.75% from the current 5.0%.