GBP/USD remains low around the mid-1.2800s, holding above a multi-week low set on Monday
GBP/USD is struggling to capitalize on a sturdy overnight rally from the 1.2800 round figure or near three-week low and is attracting some selling during Tuesday’s Asian session. Spot prices are currently trading with a negative bias around the mid-1.2800s amid moderate US dollar (USD) strength, although the fundamental backdrop warrants caution for bearish traders.
The softer risk tone is helping the safe-haven US dollar (USD) trade with a mildly positive bias just below the two-and-a-half-week high reached on Monday and is proving to be a key factor in exerting some pressure on the GBP/USD pair. That said, expectations that the Federal Reserve (Fed) will start cutting borrowing costs in September could act as a headwind for the greenback. Additionally, investors may prefer to wait for more clues on the Fed’s rate cut path before committing to a firm near-term direction. Hence, attention will remain focused on the outcome of the highly anticipated two-day FOMC monetary policy meeting on Wednesday. Read more…
The GBP/USD pair was suspended on Monday ahead of further central bank presentations.
GBP/USD edged closer to its mid-range on Monday as Cable traders brace for a double-header of interest rate calls from both the Federal Reserve (Fed) and the Bank of England (BoE) later this week. The Fed is broadly expected to keep rates on hold once more on Wednesday, while markets are eyeing a first-quarter rate cut from the BoE on Thursday.
The Fed’s upcoming interest rate call on Wednesday will be closely watched as investors look for signs that the Fed is on track to deliver a hotly anticipated rate cut when the Federal Open Market Committee (FOMC) meets again in September. Markets are generally expecting a rate cut of at least a quarter percentage point on September 18, with interest rate markets pricing in a 90% chance of a 25 basis point cut and a hopeful 10% bet on a double cut, according to the CME’s FedWatch tool. Read more…
