The 10-year US Treasury bond yield stays in legacy fx review the red below 3.7% as markets reassess the odds of a large Fed rate cut, helping XAU/USD push higher. The European Central Bank is expected to cut key rates by 25 bps at the September policy meeting. ECB President Christine Lagarde’s presser and updated economic forecasts will be closely scrutinized for fresh policy cues.
Australian Dollar and Pound Sterling events
WTI Oil is rebounding off four-month lows on renewed expectations the Fed may cut interest rates by 50 bps. Supply closures from Hurricane Francine which is ravaging the Gulf of Mexico are another bullish factor. WTI is forming short-term bullish reversal patterns on the daily and weekly charts. According to the CME FedWatch Tool, markets are currently pricing in a stronger-than-40% probability of a 50 basis points Federal Reserve (Fed) rate cut at next week’s policy meeting, up from about 20% earlier in the week. USD/JPY remains under some selling pressure on Friday and hits a fresh YTD low. The divergent Fed-BoJ policy expectations continue to weigh heavily on the pair.
British Pound / Australian Dollar
The GBP/USD (or Pound / Dollar) currency pair belongs to the group of ‘Majors’, a way to mention the most important pairs in the world. The pair is also called ‘The Cable’, referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs. BoE policymakers continue to push back against expectations of rate cuts next year. However, deteriorating economic performance prompted money markets to begin pricing in four 25 bps rate cuts starting from the summer, anticipating the key rate to be slashed from 5.25% to as low as 4.25% by the end of 2024. Gold preserves its bullish momentum and trades near $2,580 after setting a new record-high slightly above this level.
GBP/USD FORECAST
Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. A general election is expected next year in the US and the UK, which could fuel intense volatility around the GBP/USD pair. Amidst looming inflation and growth concerns, the political developments on both sides of the Atlantic are likely to be closely followed.
- The European Central Bank is expected to cut key rates by 25 bps at the September policy meeting.
- The GBP/USD (or Pound / Dollar) currency pair belongs to the group of ‘Majors’, a way to mention the most important pairs in the world.
- Import Price Index and Export Price Index data for July will be featured in the US economic docket.
- ECB President Christine Lagarde’s presser and updated economic forecasts will be closely scrutinized for fresh policy cues.
- Softer-than-forecast producer inflation data made it difficult for the USD to stay resilient against its major rivals.
- Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush.
The broad-based selling pressure surrounding the US Dollar (USD) and the improving risk mood helped GBP/USD gather bullish momentum in the second half of the day on Thursday. Jerome Powell took office as chairman of the Board of Governors of the itrader review Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979.
GBP/USD: Pound Sterling capitalizes on increasing odds of large Fed rate cut
Softer-than-forecast producer inflation data made it difficult for the USD to stay resilient against its major rivals. The US bureau of Labor Statistics (BLS) reported that the Producer Price Index rose 1.7% in August, down from 2.1% in July and below analysts’ estimate of 1.8%. Bitcoin trades above $58,000 at the time of writing, adding 2% to its value this week. Ethereum hovers around $2,300 as WazirX exchange exploiter moves 5,000 Ether to a new wallet address and a crypto mixer.
Investors look to Fed and BoJ meetings next week for a fresh directional impetus. Import Price Index and Export Price Index data for July will be featured in the US economic docket. Later in the session, the University of Michigan will release the preliminary Consumer Sentiment Survey for September. In case risk flows continue to dominate the action in the American session, GBP/USD could inch higher heading into the weekend.