Market news
07.05.2024, 23:12

GBP/USD hovers around 1.2500 on the stronger US Dollar, focus on BoE rate decision

  • GBP/USD weakens to 1.2500 amid a firmer USD on Wednesday.
  • Fed’s Kashkari said it’s too early to declare that inflation has stalled out, and they might cut rates this year if inflation eases.
  • The BoE is expected to leave the interest rate unchanged at 5.25% at its May meeting on Thursday.

The GBP/USD pair trades on a softer note around 1.2500 on Wednesday during the early Asian session. The USD Index (DXY) recovers modestly to 105.40, which drags the major pair lower. The Federal Reserve’s (Fed) Philip Jefferson,  Susan Collins, and Lisa Cook are scheduled to speak later on Wednesday. The Bank of England's (BoE) interest rate decision will take centre stage on Thursday.

Minneapolis Fed Bank President Neel Kashkari said on Tuesday that it is too early to declare that inflation has stalled out, and the Fed might cut interest rates this year if price pressures ease. Richmond Fed President Thomas Barkin stated that he believes that current rates will be enough to bring inflation down and that the Fed can afford to be patient due to a strong job market. The US Fed officials reiterated that more data would be needed in the outlook for inflation returning to the 2% target before cutting rates.

Fed easing expectations have fallen a bit and lifted the Greenback against its rivals. The chance of a June cut remains steady at around 10%, while September odds have fallen to 85%, according to the CME FedWatch tool. On Friday, traders will monitor the preliminary University of Michigan Consumer Sentiment Index, which is estimated to drop from 77.2 in April to 76.0 in May.

On the other hand, the Pound Sterling (GBP) edges lower as investors focus on the upcoming monetary policy meeting. The UK central bank is anticipated to hold interest rates steady at 5.25%. However, there is speculation that the BoE will cut interest rates earlier than the Fed, which weighs on the Cable. BoE Governor Andrew Bailey said last month that he was comfortable with market expectations of two or three rate cuts for this year. 

GBP/USD

Overview
Today last price 1.2502
Today Daily Change -0.0060
Today Daily Change % -0.48
Today daily open 1.2562
 
Trends
Daily SMA20 1.2493
Daily SMA50 1.2611
Daily SMA100 1.2644
Daily SMA200 1.2547
 
Levels
Previous Daily High 1.2594
Previous Daily Low 1.2538
Previous Weekly High 1.2635
Previous Weekly Low 1.2466
Previous Monthly High 1.2709
Previous Monthly Low 1.23
Daily Fibonacci 38.2% 1.2573
Daily Fibonacci 61.8% 1.256
Daily Pivot Point S1 1.2536
Daily Pivot Point S2 1.2509
Daily Pivot Point S3 1.248
Daily Pivot Point R1 1.2592
Daily Pivot Point R2 1.2621
Daily Pivot Point R3 1.2648

 

 

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