GBP/USD Price Forecast: Second Day of Gains as Rate Cut Hopes Persist
GBP/USD saw a second day of gains as bidders returned to Cable, despite a miss in US early jobs data. Market sentiment remains high on hopes for an extended rate cut from the Federal Reserve.
US Nonfarm Payrolls (NFP) data on Friday will provide insight into the depth of the upcoming Fed rate trim, drawing plenty of investor attention.
According to ADP, the US added 99K net new jobs in August, sparking risk aversion and concerns of a possible recession. Friday’s NFP report is expected to show a print of 160K, influencing the Fed’s rate decision on September 18.
Rate markets are currently betting on a 40% chance of a 50 bps rate cut, with the remaining 60% expecting a 25 bps trim. Investors will use Friday’s NFP print to assess the Fed’s next move.
GBP/USD Price Forecast
GBP/USD remains down from multi-month highs but stays bullish above the 200-day EMA. Immediate downside target for shorts is the 50-day EMA above 1.2900.
Pound Sterling FAQs
The Pound Sterling (GBP) is the official currency of the UK, accounting for 12% of all FX transactions. Its value is influenced by monetary policy, economic data, and trade balance indicators.
Monetary policy decisions by the Bank of England, economic indicators, and trade balance data can impact the value of GBP. Strong economic data and positive trade balances strengthen the Pound Sterling, while weak data can lead to depreciation.
Overall, the GBP/USD price forecast indicates potential gains as market sentiment remains positive and the Fed’s rate cut decisions loom. Investors should closely monitor Friday’s NFP report for further insights into the market direction.