The GBP/USD pair is on the rise as market optimism improves with tensions in the Middle East easing. The recent exchange of fire between Israel and Hezbollah did not escalate further, calming concerns of a broader conflict. US Air Force General C.Q. Brown’s reassurances have helped the risk-sensitive GBP/USD pair trade around 1.3190 during Asian hours today.
At the Jackson Hole Symposium, US Federal Reserve Chairman Jerome Powell hinted at policy adjustments, but did not specify the timing or scale of rate cuts. Markets are anticipating at least a 25 basis point cut in September, with San Francisco Fed President Mary Daly supporting the idea of starting with a quarter-point reduction if inflation slows and job growth remains steady.
In the UK, the BRC Shop Price Index fell by 0.3% year-on-year in August, the first decline since October 2021. Prime Minister Keir Starmer acknowledges the challenges ahead, emphasizing that change will take time but his government is committed to addressing various issues like overcrowded prisons and healthcare waiting lists.
Analysis:
– Improved market sentiment due to easing Middle-East tensions is boosting the GBP/USD pair.
– Expectations of a Fed rate cut in September are driving market speculation.
– Decline in UK shop prices indicates a shift in consumer spending habits.
– Prime Minister Starmer’s focus on long-term change could impact policy decisions and economic stability in the UK.