GBP/USD inches higher to around 1.2620, US market will observe the Presidents’ Day holiday
- GBP/USD retraces its recent losses on dovish sentiment toward the Fed rate cut in March.
- Ex-fed James Bullard suggested that the FOMC should consider reducing policy rates in March.
- UK Rightmove House Price Index (YoY) rose by 0.1% in February from the previous decline of 0.7%.
The GBP/USD trends upwards as the US Dollar (USD) experiences downward pressure, influenced by market sentiment leaning towards the anticipation of a Federal Reserve rate cut in the upcoming March meeting. This sentiment was reinforced when former Fed official James Bullard suggested at the National Association for Business Economics (NABE) conference that the Fed should consider lowering interest rates to prevent hindering economic activity due to higher rates. During Asian trading hours on Monday, the GBP/USD pair trades higher around 1.2620.
Furthermore, UK housing data indicated an improvement annually in domestic property prices, which may have provided some support to the GBP/USD pair. The UK Rightmove House Price Index (YoY) saw an increase of 0.1% in February compared to the previous decline of 0.7%. However, the monthly report showed a contraction, with February's growth at 0.9% compared to the previous rise of 1.3%.
The United Kingdom has officially entered a technical recession, characterized by two consecutive quarters of negative GDP growth. Additionally, Bank of England policymaker Catharine L. Mann mentioned that the central bank needs at least one more set of inflation data before determining its next course of action.
The US Dollar Index (DXY) continues its downward trend for the fourth consecutive session, slipping to around 104.20 at the time of writing. Despite the boost provided by the improved Producer Price Index (PPI) from the United States last Friday, the US Dollar (USD) eventually closed the session with losses. United States market will observe the Presidents’ Day bank holiday on Monday.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
