GBP/USD senses hurdles below 1.1980 as hawkish Fed members strengthen risk-off mood


Share:
  • GBP/USD has dropped after the conclusion of the short-lived pullback to near 1.1976 amid a risk-off mood.
  • Hawkish commentary from Fed policymakers aims to bring US Treasury yields back to life.
  • The UK economy is expected to deliver negative GDP growth for four consecutive quarters.

The GBP/USD pair has witnessed selling pressure around 1.1976 in the Tokyo session. The short-lived recovery in the Cable from the cushion of 1.1940 has been terminated as hawkish commentaries from Federal Reserve (Fed) policymakers have strengthened the risk aversion theme.

The US Dollar Index (DXY) has resumed its upside journey after a corrective move to near 106.60. S&P500 futures have rebounded marginally in the Asian session, but the road to reversal is still far. Meanwhile, the 10-year US Treasury yields have recovered to near 3.69%.

The alpha generated by US Treasury bonds has resurfaced as investors believe that the interest rate hike deceleration doesn’t resemble a pause in further policy tightening. The headline United Stated inflation is at 7.7%, far from the targeted rate of 2%, and required a heap of effort from the Federal Reserve (Fed) policymakers.

Richmond Fed Bank President Thomas Barkin said on Monday that he supports smaller interest-rate hikes ahead as the central bank moves to bring down too-high inflation, as reported by Reuters.

Also, Cleveland Fed Bank President Loretta Mester believes that the Federal Reserve is not near to a pause in a rate hike, as reported by Financial Times. She added that more good inflation reports and more signs of moderation are required before building an action plan of pausing rate hikes.

The US Gross Domestic Product (GDP) data will be keenly watched. The preliminary GDP for the third quarter is seen unchanged at 2.6%. As the Fed is dedicated to bringing price stability, a slowdown in the growth rate is highly recommended. A spell of improvement in the growth rates will continue to keep reign into inflation as solid GDP indicates robust demand from individuals, which doesn’t lead to a decline in price growth.

On the Pound Sterling front, Economists at Danske Bank have confirmed that the United Kingdom has entered a recession. They expect negative GDP growth for four consecutive quarters and growth not to return until the fourth quarter of CY2023.

GBP/USD

Overview
Today last price 1.1963
Today Daily Change 0.0015
Today Daily Change % 0.13
Today daily open 1.1948
 
Trends
Daily SMA20 1.173
Daily SMA50 1.1428
Daily SMA100 1.1645
Daily SMA200 1.2176
 
Levels
Previous Daily High 1.2118
Previous Daily Low 1.1941
Previous Weekly High 1.2154
Previous Weekly Low 1.1779
Previous Monthly High 1.1646
Previous Monthly Low 1.0924
Daily Fibonacci 38.2% 1.2009
Daily Fibonacci 61.8% 1.205
Daily Pivot Point S1 1.1887
Daily Pivot Point S2 1.1825
Daily Pivot Point S3 1.1709
Daily Pivot Point R1 1.2064
Daily Pivot Point R2 1.218
Daily Pivot Point R3 1.2242

 

 

 

 

 

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD holds above 1.0700, eyes on Powell

EUR/USD holds above 1.0700, eyes on Powell

EUR/USD edged lower toward 1.0700 in the early European session but managed to hold above that level. As investors await speeches from ECB officials and FOMC Chairman Jerome Powell, the pair struggles to make a decisive move in either direction.

EUR/USD News

GBP/USD falls to fresh monthly low below 1.2000

GBP/USD falls to fresh monthly low below 1.2000

GBP/USD came under renewed bearish pressure and touched its lowest level in a month below 1.2000 on Tuesday. Despite the modest improvement witnessed in risk mood, the US Dollar holds its ground and weighs on the pair as focus shifts to FOMC Chairman Powell's speech.

GBP/USD News

Gold retreats below $1,870 as US yields rebound

Gold retreats below $1,870 as US yields rebound

Gold price erased its daily recovery gains and turned flat slightly below $1,870 heading into the American session. Following a downward correction earlier in the day, the benchmark 10-year US Treasury bond yield staged a rebound and caused XAU/USD to turn south ahead of FOMC Chairman Powell's speech.

Gold News

Will Bitcoin price test $20,000 again?

Will Bitcoin price test $20,000 again?

Bitcoin price shows clear signs of distribution occurring on the four-hour chart, which indicates the possibility of a trend reversal. Moreover, BTC has been consolidating for more than two weeks with no direction in sight.

Read more

Central banks, markets and the economy: Three times wrongfooted

Central banks, markets and the economy: Three times wrongfooted

In the US, financial conditions have eased in recent months and weighed on the effectiveness of the Fed’s policy tightening. Jerome Powell recently gave the impression of not being too concerned, so markets rallied.

Read more

Forex MAJORS

Cryptocurrencies

Signatures