On Wednesday, GBP/USD slipped back below 1.3200 as recent bullish market flows took a breather. Investors are eagerly anticipating Friday’s US Personal Consumption Expenditure (PCE) inflation data as they speculate on the possibility of a rate cut from the Federal Reserve in September.

With UK economic data limited this week, the Pound Sterling is vulnerable to shifts in broad-market sentiment. While US GDP figures are set to release on Thursday, little movement is expected as Q2 annualized GDP growth is already priced in near 2.8%.

The key focus remains on Friday’s US PCE inflation data, which will provide insights into the direction of interest rates. Investors are closely monitoring inflation trends to gauge the likelihood of a rate cut by the Federal Reserve next month.

GBP/USD Price Forecast

GBP/USD retreated from recent highs but downside momentum remains limited for now. Although the pair fell below 1.3200, bearish momentum could gain traction with price action trading above the 200-day Exponential Moving Average (EMA) at 1.2695.

GBP/USD Daily Chart

GBP/USD Daily Chart

Pound Sterling FAQs

  • The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the United Kingdom.
  • Monetary policy decisions by the Bank of England are the primary factor influencing the value of the Pound Sterling.
  • Economic data releases, such as GDP and employment numbers, can impact the value of the Pound Sterling.
  • The Trade Balance indicator also plays a significant role in determining the strength of the Pound Sterling based on export-import differentials.

Overall, the GBP/USD pair is currently facing downward pressure as market participants await key economic data releases. The upcoming US PCE inflation figures will be crucial in determining the future direction of interest rates and could impact the performance of the Pound Sterling. Investors should closely monitor these developments to make informed decisions regarding their financial portfolios.

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