Market news
06.05.2024, 05:25

GBP/USD rises to near 1.2550 due to dovish sentiment surrounding Fed

  • GBP/USD extends its gains due to revived expectations for the Fed’s interest rate cuts in 2024.
  • US Nonfarm Payrolls reported fresh 175K jobs were added in April, lower than the estimated 243K.
  • BoE is expected to keep current rates at 5.25% on Thursday due to concerns about robust wage growth in the UK.

GBP/USD continues its winning streak for the fourth consecutive day, trading around 1.2550 during the Asian trading hours on Monday. The appreciation of the GBP/USD pair could be attributed to the recalibrated expectations for the Federal Reserve’s (Fed) interest rate cuts in 2024 following the release of lower-than-expected jobs data from the United States (US).

On Friday, US Nonfarm Payrolls showed that the United States (US) economy added 175,000 jobs in April, lower than the estimated 243,000, signaling a significant slowdown from March's addition of 315,000 jobs. Additionally, Average Hourly Earnings (YoY) increased by 3.9% in April, slightly lower than expected at 4.0% and 4.1% prior. In the meantime, the monthly growth was at 0.2%, slightly falling short of the expected 0.3%.

The Federal Reserve is now anticipated to enact its initial cut in September, a shift from earlier projections pointing toward November. As per the CME FedWatch Tool, the likelihood of a 25 basis points (bps) rate reduction by the Fed during September's meeting has risen to 48.8%, up from 43.8% a week ago.

Across the pond, the Bank of England (BoE) is expected to maintain rates unchanged at 5.25% during Thursday's meeting. Investor sentiment regarding interest rate cuts by the BoE has been postponed to September, as investors express concerns about robust wage growth in the United Kingdom (UK), which is fueling core inflation, the central bank's preferred inflation measure.

In April, BoE Governor Andrew Bailey conveyed optimism as the UK's inflation appeared to be on track to meet the 2% target. The inflation rate dropped to 3.2% in March, marking the lowest rate since September 2021.

GBP/USD

Overview
Today last price 1.2547
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.2547
 
Trends
Daily SMA20 1.2497
Daily SMA50 1.2613
Daily SMA100 1.2645
Daily SMA200 1.2549
 
Levels
Previous Daily High 1.2635
Previous Daily Low 1.253
Previous Weekly High 1.2635
Previous Weekly Low 1.2466
Previous Monthly High 1.2709
Previous Monthly Low 1.23
Daily Fibonacci 38.2% 1.2595
Daily Fibonacci 61.8% 1.257
Daily Pivot Point S1 1.2506
Daily Pivot Point S2 1.2465
Daily Pivot Point S3 1.2401
Daily Pivot Point R1 1.2612
Daily Pivot Point R2 1.2676
Daily Pivot Point R3 1.2717

 

 

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