GBP/USD consolidates in a range around mid-1.2800s, looks to BoE for fresh impetus
The GBP/USD pair struggles to capitalize on the previous day's post-FOMC positive move and oscillates in a narrow trading band during the Asian session on Thursday. Spot prices currently trade around mid-1.2800s, nearly unchanged for the day as traders opt to wait on the sidelines ahead of the Bank of England (BoE) policy update.
Signs that inflationary pressures are receding globally have been fueling speculations that the UK central bank will cut interest rates later today. In fact, financial markets are pricing in over a 65% chance that the BoE will lower rates from a 16-year high of 5.25% and expect one more quarter-point cut before the end of the year. This, in turn, is seen acting as a headwind for the British Pound (GBP) and acting as a headwind for the GBP/USD pair. Read more...
GBP/USD churns below 1.2900 ahead of BoE rate call
GBP/USD waffled in a near-term range on Wednesday after the Federal Reserve (Fed) hit wide market expectations of one last rate hold for July, with expectations of a September Fed rate cut fully priced in, key data pending. The Bank of England (BoE) is expected to deliver a rate cut for the first time since March of 2020, but odds-makers are expecting a close 5-to-4 vote from the BoE’s Monetary Policy Committee (MPC).
Fed Chairman Jerome Powell laid out exactly what the Fed needs to see in order to deliver a rate cut in September, namely continued easing in inflation figures and US labor markets to either remain where they are or soften further, giving markets a hard target on upcoming key US data releases. US Nonfarm Payrolls looms ahead on Friday, and is expected to deliver on at least one item on the Fed’s wishlist as net job additions in July are expected to ease further. Read more...
GBP/USD muted after Fed’s hold rates, pushes back against easing
The GBP/USD whipsawed during the North American session after the Federal Reserve (Fed) decided to keep rates unchanged yet pushed back against easing policy, noting, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” The major trades are volatile, around 1.2800-1.2850, and register modest losses.
The Federal Reserve acknowledged that inflation has eased somewhat over the year yet “remains somewhat elevated.” Policymakers noted that the dual mandate risks became more balanced, and “the Committee is attentive to the risks to both sides of its dual mandate.” Read more...
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