As the Pound Sterling (GBP) makes a strong comeback above the key support level of 1.3200 against the US Dollar (USD), traders are closely monitoring the upcoming US core PCE inflation data for July. This data has the potential to impact market speculation regarding the size of the Fed’s rate cut. Investors are also anticipating one more interest rate cut from the Bank of England (BoE) later this year.
The recent strength of the GBP/USD pair comes as the US Dollar faces pressure amidst expectations of interest rate cuts by the Federal Reserve (Fed) starting from the September meeting. The Fed’s dovish stance, as highlighted by Chair Jerome Powell at the recent Jackson Hole Symposium, has fueled speculations of a 25 or 50-basis-points cut in interest rates.
Market focus is now on the upcoming US Personal Consumption Expenditure Price Index (PCE) report for July, which could provide further insights into the Fed’s monetary policy decision in September. Additionally, key US data releases, including the second estimate of Q2 GDP and weekly Jobless Claims numbers, are also on investors’ radar.
Daily Market Update: Pound Sterling Shows Strength
- GBP outperforms its major peers in European trading hours.
- BoE Governor Andrew Bailey emphasizes cautious approach to interest rate cuts.
- Market expectations point towards one more BoE rate cut this year.
Technical Analysis: Pound Sterling’s Bullish Trend
The GBP/USD pair finds support near 1.3200 and remains in an upward trend.
Key technical indicators suggest a strong upside momentum for the Pound Sterling, with potential resistance levels at 1.3500 and 1.3640.
Pound Sterling FAQs
- The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the UK.
- Monetary policy decisions by the BoE are crucial in determining the value of GBP.
- Economic indicators and data releases can influence the direction of the Pound Sterling.
- The Trade Balance is a significant factor affecting the value of the Pound Sterling.
Overall, the Pound Sterling’s recent performance against the US Dollar and other major currencies reflects the ongoing market dynamics and expectations regarding central bank policies. Investors should stay informed about upcoming data releases and central bank decisions to make informed decisions regarding their finances.