- GBP/USD is facing fragile barricades in overstepping the critical hurdle of 1.2080.
- FOMC minutes are supporting a slowdown in the rate hike pace to reduce financial risks.
- BOE’s Bailey is expected to hike its interest rates by 50 bps in December monetary policy meeting.
The GBP/USD pair is displaying signs of loss in the upside momentum while attempting to cross the immediate hurdle of 1.2080 in the Tokyo session. The upside momentum is not completely exhausted as the risk profile is full of optimism. A continuous oscillation of the Cable above the psychological resistance of 1.2000 indicates that bulls are in their comfort zone and more upside is still favored.
Meanwhile, the US dollar index (DXY) is set to test the round-level support of 106.00 due to a sheer decline in safe-haven’s appeal. The downside momentum in the US Dollar could drag it to a test of a three-month low at 105.34 as odds of continuation of 75 basis points (bps) rate hike structure by the Federal Reserve (Fed) are fading away.
The 10-year US Treasury yields have slipped below 3.69% as a majority of Fed policymakers are supporting a slowdown in the pace of hiking interest rates. The minutes of the Federal Open Market Committee (FOMC) cleared that Fed think tanks are likely to observe the progress of the efforts made yet to bring price stability. Also, a reduction in financial risks is highly required now.
On the United Kingdom front, after adding 75 bps in the interest rates by the Bank of England (BOE) in its November monetary policy. BOE Governor Andrew Bailey is expected to escalate interest rates further by 50 bps, according to a Reuters poll conducted on Nov 18-22.
BOE Chief Economist Huw Pill cited that surge in people quitting the British workforce because of ill health or early retirement could force the BOE to further increase interest rates, as reported by The Guardian. He further added that “Accelerating unemployment among the working age population is indicating an adverse supply shock, which could lead to higher payroll bills for the employers, and henceforth a rise in inflation”.
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.
Recommended content
Editors’ Picks
AUD/USD recovers above 0.6750 after Australian jobs data
AUD/USD picks up a late bid and recovers above 0.6750 in Asian trading on Thursday, following the release of mixed Australian employment data. The extended post-Fed US Dollar recovery, amid a cautious market mood, could limit the pair's upside ahead of US data.
USD.JPY jumps toward 144.00 on the road to recovery
USD/JPY gains traction and approaches 144.00 in Thursday's Asian session. The uptick of the pair is bolstered by the impressive US Dollar recovery. Investors shift their attention to the US data and the Bank of Japan interest rate decision on Friday.
Gold price remains on the defensive amid the post-FOMC USD recovery from YTD low
Gold price struggles to lure buyers despite the Fed’s jumbo interest rate cut on Wednesday. A further recovery in the US bond yields underpins the USD and caps the non-yielding metal. Concerns about an economic slowdown, along with geopolitical risks, help limit the downside.
Ethereum attempts recovery following first rate cut in four years
Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.
Australian Unemployment Rate expected to hold steady at 4.2% in August
The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.