The Pound Sterling (GBP) is facing pressure against the US Dollar (USD) as bets on a rate cut by the Bank of England (BoE) gain momentum. This has led to the GBP/USD pair hovering around the support level of 1.2700 in the New York session, with a narrow trading range of 1.2890-1.2940. On the other hand, the USD is strengthening, fueled by speculation of a re-election win for Donald Trump in the upcoming US presidential elections, pushing the US Dollar Index (DXY) near 104.50.
Investors are closely watching the US preliminary S&P Global Purchasing Managers Index (PMI) data for July, along with other key economic indicators like Q2 GDP, Durable Goods Orders, and PCE Price Index for June. These data points will offer insights into the potential timing of interest rate cuts by the Federal Reserve (Fed) this year.
Analysts expect the Manufacturing PMI to show a slight expansion to 51.7, while the Services PMI is anticipated to slow down to 54.4. The CME FedWatch tool indicates expectations of rate cuts by the Fed in the September meeting, followed by additional cuts in November or December.
Market Analysis: Pound Sterling Weakens – What Investors Need to Know
- The Pound Sterling is losing ground against major currencies, except the AUD and NZD, due to increasing speculation of BoE rate cuts in August.
- Weaker-than-expected UK Retail Sales data for June has further fueled expectations of policy normalization by the BoE.
- Slowing Average Earnings growth has added to the case for rate cuts, despite remaining above the threshold for confidence in monetary policy.
- Key focus for the Pound Sterling will be the UK preliminary S&P Global/CIPS PMI data for July, expected to reflect improvements in the Manufacturing and Composite PMI.
GBP Price Today: How the Pound Sterling Is Performing
The table below shows the percentage change of the British Pound (GBP) against major currencies today. Notably, the GBP has been strongest against the NZD.
Technical Analysis: Pound Sterling’s Current Position
The GBP is trading near the support level of 1.2900 against the USD, with indicators suggesting an intact uptrend. Key resistance lies at 1.3140, while support is at 1.2900 for Pound Sterling bulls.
Economic Indicator Focus: Core PCE Price Index YoY
The Core Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge for the Fed, is closely watched for its impact on the USD. Higher readings are bullish for the USD, while lower readings are bearish.
Overall, the Pound Sterling’s performance is influenced by economic data, central bank policies, and geopolitical events, making it crucial for investors to stay informed and adapt their strategies accordingly.