The British Pound weakens as Fed interest rate uncertainty supports the US Dollar
The GBP/USD rate falls after opening in a bullish gap, remaining in positive territory and on Tuesday during Asian hours it was trading around 1.3290. The currency pair is under pressure as the US dollar (USD) stabilizes amid market caution ahead of the Federal Reserve’s upcoming decision on Wednesday.
According to the CME FedWatch Tool, markets are pricing in a nearly 38% chance of a rate hike in July, an unusually high level of uncertainty so close to the meeting. Citadel Securities expects the Fed to raise interest rates to shore up Chairman Kevin Warsh’s credibility in fighting inflation after his repeated promises to restore price stability. Looking ahead, the probability of an escalate of at least 25 basis points in September is currently around 81.4%. Read more…
The UK’s best summer of data sent sterling to a four-week low
On Monday, the pound sterling/dollar rate fell below 1.3300, about 0.3% lower on the day, and returned to the previous level seen in the first days of July. It comes at the end of the strongest series of British data since spring, which is worth sitting on. The dollar itself did almost nothing throughout the session.
Last week brought the UK a series of data that its currency had been waiting for. Retail sales rose 1% in June against expectations for a slight decline, helped by balmy weather and World Cup spending. In July, consumer confidence reached a six-month high and initial surveys of economic activity led the private sector to return to expansion faster than expected. Read more…
The British pound falls as risk-free sentiment strengthens the US dollar
The pound sterling is losing 0.13%, even though the dollar rate remains unchanged during the day. Risk appetite worsened after news that a Chinese state-backed company was producing chip-making machinery prompted a sell-off at Dutch firm ASML. GBP/USD is trading at 1.3305, having hit a high of 1.3363.
The de-escalation of the conflict in the Middle East brings relief to major central banks in the face of falling oil prices after the United States halted attacks on Iran over the weekend. US President Donald Trump warned against further military action if negotiations between Washington and Tehran fail. He said the attacks would be “very powerful.” Read more…
