GBP/USD holds below the mid-1.2700s, eyes on UK, US PMI data

GBP/USD loses ground around 1.2725 in the first trading day of 2024.
The markets are pricing in 88% possibility of rate cuts in March, according to the CME Group's FedWatch tool.
Investors are pricing as many as six quarter-point rate cuts from the Bank of England (BoE) during 2024.
UK S&P Global/CIPS Manufacturing PMI and US S&P Global Manufacturing PMI reports will be released later on Tuesday.

Lallalit Srijandorn FXStreet

The GBP/USD pair posts modest losses during the early Asian session on Tuesday. The modest rebound in the US Dollar (USD) lends some support to the major pair. At press time, GBP/USD is trading near 1.2725, down 0.04% for the day.

After the US Federal Reserve's (Fed) final meeting of the year earlier in December, Fed officials held rates steady for the third straight month and signaled a series of interest rate cuts in 2024 as inflation eases faster than estimated. Traders are betting on aggressive rate cuts, starting as early as March. The markets are pricing in 88% odds rate cuts in March, according to the CME Group's FedWatch tool.

Data released on Friday revealed that the US Chicago Purchasing Managers' Index (PMI) arrived at 46.9 in December from 55.8 in November, weaker than the estimation of 51.0. Market players will take more cues from the US Nonfarm Payrolls (NFP) due on Friday. The figure is projected to show an increase of 163K in December versus 199K prior.

On the British Pound front, the Bank of England (BoE) said it is premature to talk about cutting rates. However, investors are pricing as many as six quarter-point rate cuts in 2024. The next BoE monetary policy meeting will be on February 1.

Later on Tuesday, the UK S&P Global/CIPS Manufacturing PMI for December will be released. Also, the US S&P Global Manufacturing PMI will be due. The highlight this week will be the Federal Open Market Committee (FOMC) minutes on Wednesday and December’s US employment data, including US Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings, due on Friday.

GBP/USD

Overview
Today last price	1.2725
Today Daily Change	-0.0006
Today Daily Change %	-0.05
Today daily open	1.2731

Trends
Daily SMA20	1.2666
Daily SMA50	1.25
Daily SMA100	1.245
Daily SMA200	1.2531

Levels
Previous Daily High	1.2731
Previous Daily Low	1.2731
Previous Weekly High	1.2828
Previous Weekly Low	1.2685
Previous Monthly High	1.2828
Previous Monthly Low	1.2501
Daily Fibonacci 38.2%	1.2731
Daily Fibonacci 61.8%	1.2731
Daily Pivot Point S1	1.2731
Daily Pivot Point S2	1.2731
Daily Pivot Point S3	1.2731
Daily Pivot Point R1	1.2731
Daily Pivot Point R2	1.2731
Daily Pivot Point R3	1.2731

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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