Pound Sterling Hits Two-Week Low Against US Dollar Ahead of Core PCE Price Index – BoE Expected to Cut Rates
The Pound Sterling (GBP) dropped to a fresh two-week low at 1.2845 against the US Dollar (USD) on Friday as investors await the release of the US core Personal Consumption Expenditures price index. The BoE is anticipated to reduce interest rates next week, while robust US Q2 GDP growth has improved the economic outlook.
The core PCE inflation data, a key measure for the Fed, is projected to slow to 2.5% year-over-year in June. A decline in inflation could lead to early interest rate cuts by the Federal Reserve, impacting the value of the US Dollar. On the other hand, strong inflation numbers could delay rate-cut expectations.
Despite solid US GDP growth in Q2, rate cut speculation remains due to subdued price pressures. The US Dollar Index (DXY) hovers around 104.30, with the possibility of rate cuts in September. The Pound Sterling is steady ahead of the BoE’s monetary policy meeting next week, where a rate cut decision is anticipated.
Analysis:
The Pound Sterling’s decline against the US Dollar reflects market uncertainty ahead of key economic data releases and central bank decisions. A potential rate cut by the BoE could impact the GBP’s value against major currencies. Investors should monitor inflation data and central bank policies for trading opportunities in the forex market.