GBP/USD Forecast: Pound Sterling struggles to benefit from risk flows
GBP/USD has lost its traction and retreated below 1.2250 early Tuesday after having advanced toward 1.2300 on Monday. As markets remain split on the Bank of England's (BOE) next policy decision, the Pound Sterling could have a hard time capitalizing on risk flows.
The broad-based selling pressure surrounding the US Dollar provided a boost to GBP/USD on Monday. In the European morning on Tuesday, the US Dollar Index holds steady supported by recovering US Treasury bond yields. The CME Group FedWatch Tool shows that markets are pricing in a more than 80% probability that the US Federal Reserve (Fed) will raise its policy rate by 25 basis points (bps). Read more...
GBP/USD outlook: Bulls take a breather, awaiting Fed/BOE and UK CPI data
Cable is a tad lower in early Europe on Tuesday, as bulls are taking a breather after strong rally in past three days, which hit the highest since Feb 2. Overall picture remains bullish, with easing of fears about crisis in banking sector, cautiously reviving risk appetite, however, concerns about the stability of US financial system persist.
Markets focus on UK inflation data on Wednesday and BOE rate decision on Thursday for fresh signals. UK inflation is expected to ease to 9.9% in February from 10.1% in January, while the Bank of England is likely to raise interest rate by 25 basis points to 4.25%, new highest since 2008. Read more ...
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GBP/USD retreats from multi-week high, slides below mid-1.2200s amid modest USD strength
The GBP/USD pair comes under some selling pressure on Tuesday and snaps a three-day winning streak to its highest level since early February, around the 1.2285 region touched the previous day. The pair maintains its offered tone through the first half of the European session and is currently placed near the lower end of its daily range, around the 1.2235-1.2230 zone.
A strong follow-through recovery in the US Treasury bond yields assists the US Dollar (USD) to regain some positive traction and reverse a part of the overnight losses to a five-week low, which, in turn, exerts downward pressure on the GBP/USD pair. The US bond yields breathed a sigh of relief on Monday after the news that UBS will rescue Credit Suisse in a $3.24 billion deal helped ease fears of widespread contagion risk. That said, rising bets for a less aggressive policy tightening by the Federal Reserve (Fed) could act as a headwind for the US bond yields and cap any meaningful upside for the Greenback. Read more ...
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