Pound Sterling Price News and Forecast: GBP/USD drifts lower amid the hawkish Fed-inspired USD buying interest

FXStreet Team FXStreet

GBP/USD Price Analysis: Remains depressed below 1.2800, downside potential seems limited

The GBP/USD pair edges lower during the Asian session on Thursday and retreats further from over a three-month top, around the 1.2860 region touched the previous day, in reaction to softer US consumer inflation figures. Spot prices, for now, seem to have snapped a three-day winning streak and currently trade around the 1.2785 area, down 0.10% for the day.

The US Dollar (USD) builds on the overnight bounce from the weekly low in the wake of the Federal Reserve's (Fed) hawkish surprise, indicating that fewer rate cuts were needed this year. Moreover, flash figures published on Wednesday showed that the UK economic growth stalled in April after the muted rebound from last year’s recession. This, in turn, is seen undermining the British Pound (GBP) and contributing to the offered tone surrounding the GBP/USD pair. Read more...

GBP/USD trades with mild losses below 1.2800, Fed holds rate steady

The GBP/USD pair loses some ground near 1.2795 after retracing from three-month highs of 1.2860 during the early Asian session on Thursday. The negative surprise of the US Consumer Price Index (CPI) inflation report in May weighs on the Greenback, but the hawkish hold by the Federal Reserve (Fed) modestly caps the USD’s downside.

Inflation in the United States held flat in May, dragging the US Dollar (USD) lower. The CPI inflation figure eased to 3.3% on a yearly basis in May from 3.4% in April, below the market consensus of 3.4%, the US Bureau of Labor Statistics (BLS) reported on Wednesday. The core CPI, which excludes volatile food and energy prices, increased 3.4%, compared to a 3.6% rise in April and the estimation of 3.5%. On a monthly basis, the CPI was unchanged, while the core CPI increased 0.2% in May. Read more...

GBP/USD clears some gains after Fed's decision and dot plot revision

On Wednesday, the GBP/USD cleared some of its gains following the Federal Reserve (Fed) decision to hold rates steady at 5.25%-5.50% and stands at 1.2830. What strengthened the USD is that the dot plot suggested that the members are seeing two instead of three rate cuts in 2024.

Regarding economic protections, the bank revised its Personal Consumption Expenditures (PCE) forecasts to 2.4% YoY from 2.6% YoY, while growth protections remain unchanged. The interest protections, via the so-called dot plot, showed an upward revision of the interest rates by the end of 2024 now at 5.1%, up from 4.6%, and for the 2025 at 4.1%, up from 3.9%. The projection for 2026 stood at 3.1%, and the longer-run rate has been revised to 2.8% from 2.6%. Read more...

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