Pound edges lower, markets eye FedSpeak

Kenny Fisher MarketPulse

The British pound is down slightly on Friday. GBP/USD is down 0.14%, trading at 1.2648 in the European session at the time of writing.

It has been a good week for the pound, which has gained 1% against the US dollar. Wednesday’s inflation release showed CPI dipping in April, reversing the trend of the past several months. The unexpected stickiness in inflation had delayed a rate cut from the Federal Reserve and the drop in April inflation raised expectations for a rate cut, sending equity markets higher and the US dollar lower, with GBP/USD jumping 0.75% on Wednesday.

The Federal Reserve has been cautious about shifting its “higher for longer” policy, which has kept rates on hold for six straight times. The unexpected rise in inflation in the first quarter and strong US economic data has delayed plans to lower rates. The Fed signaled in January that it was planning to cut rates three times this year but is now looking at one or perhaps two rate cuts before the end of the year.

There are no key economic releases out of the US today but three FOMC members, Waller, Daly and Kugler, will deliver speeches which could provide some insights into future US rate policy. FOMC members have sounded rather hawkish, saying that restrictive policy is working and there is no rush to lower rates.

The Bank of England is under pressure to lower rates as inflation has fallen to 3.2%. The path to achieving the 2% target is likely to be bumpy but the labour market is showing signs of cooling down, which supports a rate cut. The June meeting promises to be interesting, with the markets pricing in a 50/50 probability of a rate cut or a hold.

GBP/USD technical

GBP/USD is putting pressure on support at 1.2642. Below, there is support at 1.2615.
1.2672 and 1.2699 are the next resistance lines.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.