- GBP/USD holds positive ground near 1.2540 on the weaker USD on Friday.
- The Fed held interest rates steady on Wednesday.
- The BoE is expected to leave rates unchanged for the sixth time in a row at its meeting next week.
The GBP/USD pair trades on a stronger note around 1.2540 amid the softer US Dollar (USD) on Friday during the early Asian session. The US Federal Reserve (Fed) Chair Jerome Powell delivered a modest dovish message after the meeting on Wednesday, which weighs on the Greenback. However, the ongoing backdrop of elevated inflation and robust growth in the US should keep the Fed on hold and maintain the higher-for-longer narrative, which might support the USD. Later in the day, the US S&P Global Services PMI will be due, along with the US employment data for April.
The Fed decided to leave its key interest rate steady at the highest level in more than two decades, in the range of 5.25%–5.5%, where it has stood since last July. The US central bank acknowledged the worsening inflation outlook, citing that there has been a lack of further progress toward the Fed's 2% inflation target in recent months.
Fed’s Powell emphasized that it’s unlikely that the next policy rate move will be a hike, adding that rate cut timing will depend on the data and that the unexpected weakening in the labor market could warrant a cut. Investors will closely monitor the US April Nonfarm Payrolls (NFP) on Friday. In the case of weaker-than-expected data, this could exert further selling pressure on the USD and create a tailwind for the GBP/USD pair.
On the other hand, the Bank of England (BoE) will announce its interest rate decision next week. The BoE is anticipated to hold interest rates steady at 5.25% for the sixth time in a row, while the markets have fully priced in the first rate cut in September. Market players will take more cues from the inflation outlook and cues about when the BoE will start cutting interest rates.
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
EUR/USD drops to near 1.0850, further support at nine-day EMA
EUR/USD continues to lose ground, trading around 1.0860 during the Asian hours on Friday. From a technical perspective on a daily chart analysis indicates a sideways trend for the pair as it continues to lie within the symmetrical triangle.
GBP/USD posts modest gains above 1.2650, focus on the Fedspeak
The GBP/USD pair posts modest gains near 1.2670 during the Asian session on Friday. Meanwhile, the USD Index recovers some lost ground after retracing to multi-week lows near 104.00 in the previous session.
Gold price gains ground, with Fed speakers in focus
The Gold price trades with a positive bias on Friday. The bullish move of precious metals in the previous sessions was bolstered by the softer-than-expected US inflation data in April, which triggered hope for rate cuts from the US Fed.
LINK price jumps 10% as Chainlink races toward tokenization of funds
Chainlink price has remained range-bound for a while, stuck between the $16.00 roadblock to the upside and $13.08 to the downside. However, in light of recent revelations, the token may have further upside potential.
Fed speak tempers rate cut expectations
The biggest takeaway into Friday is the latest round of Fed speak. These Fed officials reiterated their stance rates should be kept restrictive for a longer period of time until there is more clear evidence inflation is heading back towards the 2% target.