GBP/USD reaches its highest since early September, trades around 1.2630
|- GBP/USD maintains its upward trajectory on a hawkish BoE tone.
- BoE Governor Andrew Bailey mentioned the challenge of bringing inflation back to the 2% target.
- US New Home Sales dropped by 5.6% at 679K against the market consensus of 725K in October.
GBP/USD reached its highest level since early September, touching the 1.2644 level on Monday. In the Asian session on Tuesday, the GBP/USD pair maintains its upward trajectory, trading around 1.2630. The Pound Sterling (GBP) remains robust against the US Dollar (USD) for the fourth successive day, reflecting the UK economy's resilience in the face of tightening measures by the Bank of England (BoE).
Bank of England Governor Andrew Bailey acknowledged the challenge of bringing inflation back to the 2% target, emphasizing that the recent decline from 6.7% to 4.6% is linked to the decrease in energy prices. Bailey underscored the necessity of reducing inflation, recognizing the potential adverse impact on households, as higher prices could worsen conditions.
The recent report from the United States (US) Census Bureau delivered a concerning update, indicating a sharp decline in New Home Sales for October, attributed to elevated mortgage rates. The data reveals a 5.6% drop, with sales standing at 679,000, falling short of the market consensus of 725,000.
In the realm of market expectations, money market futures suggest an anticipated 25 basis points rate cut by the BoE in September of next year. In contrast, regarding the Federal Reserve (Fed), traders have fully factored in almost 85 basis points of cuts in 2024.
Tuesday is set to feature a speech from BoE Deputy Governor for Markets and Banking, David Ramsden, drawing attention from investors. Meanwhile, in the US, crucial data such as the Housing Price Index and CB Consumer Confidence will be released. Additionally, several speeches from Federal Reserve (Fed) officials are on the agenda, offering valuable insights into the central bank's outlook on the economic landscape.
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