Sterling rebounds after a moderate rise in the UK flash PMI

The pound sterling (GBP) returned to levels near 1.2970 against the US dollar (USD) during European trading hours on Thursday, after refreshing a two-month low near 1.2900 on Wednesday. The GBP/USD pair is gaining with a slight correction in the US dollarand the US dollar index (DXY) fell to around 104.20. However, the outlook for the US dollar remains unchanged due to a slight decline in market expectations for the Federal Reserve (Fed) to cut interest rates at each of its remaining policy meetings this year.

According to CME’s FedWatch tool, the probability that the central bank will cut interest rates by 50 basis points to 4.25%-4.50% by the end of the year fell slightly to 68.3% from 71.7% a week ago. The tool shows that investors have priced in a 25 basis point rate cut in November, but are not fully confident of a similar move in December. Read more…

GBP/USD Forecast: Sterling could rise if risk sentiment improves

GBP/USD remains stable and sees slight gains above 1.2950 in the European morning on Thursday. Sterling could benefit from an improvement in risk sentiment in the second half of the day and strengthen.

The US dollar (USD) maintained its strength on Wednesday and caused GBP/USD to fall to its weakest level since mid-August near 1.2900. The USD took advantage of rising US Treasury yields and considered safe-haven demand, while Wall Street’s main indexes fell sharply after the opening bell. Read more…