The GBP/USD currency pair has been witnessing a notable uptrend, currently positioned at 1.2560, marking its fifth consecutive day of gains during the Asian trading session on Tuesday. The prevailing weakness of the US dollar has pressured it due to a series of dovish statements from Federal Reserve officials and anticipation around monetary policy decisions in the UK and the US, driving this upward trajectory.
The US dollar’s recent decline plays a crucial role in supporting the GBP/USD pair. Dovish tones from Federal Reserve speakers, including Richmond Fed President Thomas Barkin and New York Fed President John Williams, suggest an easing approach may be forthcoming. Barkin highlighted that maintaining the current rate should help slow the economy to achieve a 2% inflation target. In contrast, Williams indicated potential rate cuts, asserting that the current policy is effective.
This week is crucial due to the Bank of England‘s interest rate decision on Thursday. It is widely anticipated that the current rate of 5.25% will be maintained. Governor Andrew Bailey stated that the BOE expects headline inflation to return to the 2% target by next April.
Concurrently, the US Federal Reserve is contemplating a potential rate cut following weaker-than-expected employment data, with market participants pricing in a 46 basis point reduction by the end of 2024, with the first cut possibly in September or November.
Recent dovish statements by several Federal Reserve officials have further muddied the waters for the US dollar’s short-term outlook. Minneapolis Fed President Neel Kashkari’s remarks on Monday underlined the nuanced approach the Fed might adopt in the coming months. The Fed’s sentiments suggest a likely decrease in US interest rates. Consequently, this weakens the dollar and indirectly boosts the GBP/USD pair.
The Bank of England’s steady interest rates contrast with the Federal Reserve’s potential policy easing. Speculations that the BoE’s easing cycle may align more closely with the European Central Bank than with the Fed could influence the GBP/USD dynamics. While a dovish stance might typically weigh on the Pound Sterling, current factors, including a weaker dollar and stable economic indicators from the UK, will likely cap any significant downside risks to the GBP/USD pair.
Key Points: XRP Price is at $0.5140, with recent highs of $0.5225 and lows of $0.4980. The 100-hourly SMA at…
Key Points Dow Jones briefly surpassed 40,000, reaching 40,051.05, but closed at 39,869.38, down 0.1%. S&P 500 closed at 5,297.10…
Key Points: Chinese Economy Landscape: April retail sales increased by 2.3%, below forecasts and March's 3.1%, reflecting cautious consumer behaviour.…
Key Points: Stable Oil Prices: Brent futures increased 0.1% to $83.33; WTI steady at $78.80 per barrel. Weekly Gains: Brent…
Key Points: GBP/JPY recovered to 197.00 after recent declines due to Japan's GDP contraction. Japan's Q1 GDP contracted by 0.5%,…
Key Point: USD/JPY recovered from 153.60 to 155.00, reaching a 200-hour EMA resistance at 155.44. Bullish trend supported by 50-day…
This website uses cookies.