GBP/USD Plunges as Markets Pile into Fed Rate Cut Bets
GBP/USD took a tumble on Monday as risk-off flows pummeled markets, but bids near 1.2800 are holding strong. Souring US economic data has investors betting on an accelerated pace of rate cuts from the Federal Reserve.
Forex Today: Fed’s rate cut gathers pace
Rate markets are pricing in nearly 85% odds of a double-cut from the Fed on September 18th after disappointing US data. With a light economic calendar this week, investors are focusing on current positioning.
July’s US PMI data showed mixed results, with Composite PMI falling below expectations but Services PMI beating forecasts. Inflation pressures are still a concern as business-level inflation continues to rise.
GBP/USD Technical Analysis
Cable is currently battling the 50-day EMA at 1.2790, struggling to break above the 1.2800 handle. Bids are holding near the 200-day EMA at 1.2672, but the pair is down 2.58% from its recent peak.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the United Kingdom. It is heavily influenced by the Bank of England’s monetary policy decisions and economic data releases.
Monetary policy, economic indicators, and trade balances all play a role in determining the value of the Pound Sterling. Strong economic data and positive trade balances can strengthen the currency, while weak data can lead to depreciation.