GBP/USD remains on the defensive near 1.2650, focus on US Initial Jobless Claims


  • GBP/USD received upward support after Wednesday's release of mixed US data.
  • US Dollar faces downward pressure as several Fed officials have adopted a softer tone.
  • Pound Sterling could face challenges due to expectations of a rate cut by the BoE in June.

GBP/USD hovers around 1.2650 during the Asian session on Thursday. However, the US Dollar (USD) encountered challenges yesterday following the release of mixed economic data from the United States (US), which showed a stronger ADP Employment Change but softer ISM Services PMI figures.

US ADP Employment Change increased by 184,000 in March, surpassing February's 155,000 rise and exceeding the market consensus of 148,000. Meanwhile, US ISM Services PMI declined to 51.4 in March from 52.6 in February, falling short of the anticipated 52.7.

By press time, the US Dollar Index (DXY) hovers around 104.20, struggling to reverse recent losses. Multiple Federal Reserve (Fed) officials have adopted a softer tone regarding the trajectory of the Fed's interest rates. Fed Chairman Jerome Powell reiterated the central bank's readiness to implement rate cuts, emphasizing a data-dependent approach.

Additionally, remarks from Atlanta Fed President Raphael Bostic, advocating for a rate cut in the final quarter of 2024, have drawn attention. Adriana Kugler, a member of the Fed Board of Governors, emphasized the ongoing disinflationary trend, suggesting that it would necessitate rate reductions. There are expectations of at least three rate cuts by the last quarter of 2024.

Global inflationary pressures seem to be subsiding, leading to speculation about potential interest rate cuts by central banks. BoE Governor Andrew Bailey has recently commented that, with further encouraging signs indicating a cooling inflation trend, the UK economy is progressing towards a point where the central bank could initiate interest rate cuts.

Money market futures traders anticipate a 25 basis point rate cut by the Bank of England (BoE) in June, with odds currently standing at 66%. Similarly, traders across the Atlantic have fully priced in a 25-basis point cut by the Federal Reserve in July. The anticipated rate cut by the BoE in June is expected to exert downward pressure on the British Pound (GBP). This could lead to an undermining of the GBP/USD pair.

GBP/USD

Overview
Today last price 1.2653
Today Daily Change 0.0001
Today Daily Change % 0.01
Today daily open 1.2652
 
Trends
Daily SMA20 1.2699
Daily SMA50 1.267
Daily SMA100 1.2663
Daily SMA200 1.2588
 
Levels
Previous Daily High 1.2656
Previous Daily Low 1.2563
Previous Weekly High 1.2668
Previous Weekly Low 1.2586
Previous Monthly High 1.2894
Previous Monthly Low 1.2575
Daily Fibonacci 38.2% 1.262
Daily Fibonacci 61.8% 1.2598
Daily Pivot Point S1 1.2591
Daily Pivot Point S2 1.253
Daily Pivot Point S3 1.2498
Daily Pivot Point R1 1.2685
Daily Pivot Point R2 1.2717
Daily Pivot Point R3 1.2778

 

 

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