The GBP/USD pair is on a downward trend, hovering near 1.2980 in the early Asian session on Tuesday. The recent comments from Fed officials are likely to put pressure on the USD and limit the pair’s downside potential. As investors await speeches from Fed’s Bostic and Barr later today, all eyes are on the upcoming speech by Fed Chair Jerome Powell on Friday.
Last week’s UK inflation and employment reports supported the BoE’s decision to keep interest rates steady at 5.0% in September. The expectation of further rate cuts by the BoE could weigh on the Pound Sterling in the short term. On the other hand, the dovish stance of Fed officials, including Minneapolis Fed President Neel Kashkari and Chicago Fed President Austan Goolsbee, could cap the upside of the US Dollar.
Traders have priced in a 77% chance of a 25 bps Fed rate cut in September, according to the CME FedWatch Tool. With more speeches from Fed officials scheduled for later today, any dovish comments could weaken the USD and provide some support for the GBP/USD pair.
Pound Sterling FAQs
- The Pound Sterling (GBP) is the oldest currency in the world, dating back to 886 AD.
- It is the official currency of the United Kingdom and accounts for 12% of all foreign exchange transactions.
- Key trading pairs include GBP/USD, GBP/JPY, and EUR/GBP.
Analysis: The GBP/USD pair is facing downward pressure due to dovish Fed comments and expectations of further rate cuts by the BoE. Traders are closely watching upcoming speeches from Fed officials for more clarity on the interest rate outlook. The outcome of these events could impact the USD and GBP in the short term, making it crucial for investors to stay informed and adjust their trading strategies accordingly.