Pound Sterling gains against US Dollar as traders brace Fed Powell’s speech
The Pound Sterling (GBP) rebounds slightly from the key support near 1.3300 against the US Dollar (USD) in Thursday’s London session after correcting sharply on Wednesday. The GBP/USD finds cushion as investors have broadly underpinned the Pound Sterling against the Greenback due to firm speculation that the Federal Reserve’s (Fed) policy-easing cycle would be deeper and faster than the one to be followed by the Bank of England (BoE) in the remainder of the year.
According to the CME FedWatch tool, the central bank is expected to reduce its key borrowing rates further by 75 basis points (bps) in the remaining two meetings this year, suggesting that there will be one 50 bps and one 25 bps rate cut. 30-day Federal fund futures pricing data shows that the probability of the Fed reducing interest rates by a larger-than-usual margin in November has increased to 61% from 39% a week ago. Read more...
GBP/USD: Unlikely to threaten the support at 1.3250 – UOB Group
The Pound Sterling (GBP) could continue to decline; oversold weakness suggest it is unlikely to threaten the support at 1.3250. In the longer run, more than week-long GBP strength has ended; it is likely to trade in a 1.3200/1.3430 range for the time being, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.
24-HOUR VIEW: “We were of the view that GBP ‘could rise and potentially reach 1.3450’ yesterday. However, after rising to 1.3430, GBP fell and broke below a few support levels, reaching a low of 1.3314. While GBP could continue to decline today, oversold conditions suggest that any weakness is unlikely to threaten the support at 1.3250 (minor support is at 1.3290). On the upside, resistance levels are at 1.3360 and 1.3390.” Read more...
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