Pound Sterling Price News and Forecast: GBP/USD mildly offered around 1.2550 as traders await Fed, BOE

FXStreet Team FXStreet

GBP/USD opens flat at around 1.2580, focus shifts on Fed-BOE policy meet

The GBP/USD pair is hovering around 1.2580 and is likely to extend further amid a rebound in the risk-sensitive currencies, witnessed on Friday. The cable attracted significant bids around 1.2510 as responsive buyers found it a value bet and drove it higher. The asset is expected to deliver wild moves this week as the market participants are awaiting the announcement of the interest rate hike by the Federal Reserve (Fed) and Bank of England (BOE) this week.

The Fed is going to bring tremendous uncertainty in the FX domain amid its dominance and expectation of a jumbo rate hike. Multi-decade inflation print at 8.5% and consistency in full-employment levels are advocating a 50 basis point (bps) interest rate hike from Fed policymakers. Along with the hawkish tone on rate announcements, hawkish guidance from the Fed is also expected to contain the inflation mess.

GBP/USD: Mildly offered around 1.2550 as traders await Fed, BOE

GBP/USD fails to extend the previous day’s corrective pullback from a two-year low, down 0.15% intraday as sellers attack 1.2550 during early Monday morning in Europe.

The cable pair’s latest weakness could be linked to the US dollar’s strong start to the key week comprising the monetary policy meeting of the Fed, as well as April’s Nonfarm Payrolls (NFP). Also weighing on the quote are the chatters surrounding the Bank of England (BOE) policymakers’ inability to copy the Fed’s tune, due to economic hardships at home.

GBP/USD corrects lower after testing 1.3400

Following Monday's advance, GBP/USD touched its highest level since mid-June slightly above 1.3400 early Tuesday but lost its bullish momentum. The pair trades marginally lower on the day at around 1.3380 as investors adopt a cautious stance following news of Iran targeting commercial ships attempting to pass through the Strait of Hormuz.

EUR/USD holds above 1.1400 as markets focus on Middle East news

EUR/USD struggles to gain traction and trades in a narrow channel above 1.1400 on Tuesday after failing to reclaim 1.1450. The pair's upside remains capped amid a modest recovery in the safe-haven US Dollar, as renewed tensions in the Strait of Hormuz and Asian tech sell-off fuel risk aversion.

Gold recovers above $4,150 following earlier decline

Gold stages a rebound after dropping toward $4,100 earlier Tuesday and trades above $4,150 in the American session. Crude oil prices edge higher amid renewed tensions in the Strait of Hormuz, reviving inflationary concerns. This, in turn, triggers a fresh leg up in US Treasury bond yields, offering some support to the US Dollar, and making it difficult for the yellow metal to gain traction.

Bonk extends correction after $20 million hack from BonkDAO treasury

Bonk remains under pressure, trading below $0.0000044 after losing over 10% in the previous day. Monday’s correction occurred as Bonk Decentralized Autonomous Organization announced a governance exploit that resulted in the theft of $20 million worth of BONK tokens from its treasury.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance, arguing that the current world demands more flexibility.