GBPUSD faces a turbulent year as central bank policies drive fluctuation. The pair has fallen to the 1.2700 level as officials from the Federal Reserve have signaled a slowdown in the possibility of rate cuts. This has given momentum to bears, pushing the pair towards the 1.2600 market zone. Several Fed policymakers have emphasized their focus on inflation more stably, suggesting a cautious approach to monetary policy.
In terms of upcoming events, the UK’s economic calendar for the week includes the release of the inflation report, followed by additional figures on Thursday. These data releases will be closely watched as market participants assess their potential impact on monetary policy and the overall health of the UK economy.
The decline in the GBP/USD pair has been influenced by the rise in US Treasury bond yields, which has led to a recovery in the US dollar. However, the pair is currently trading at the significant level of 1.2640. GBP bears are now targeting a drop below the significant level of 1.2500, to extend losses even further.
Federal Reserve Signals Rate Cut Slowdown
Last week, both the US Federal Reserve and the Bank of England announced their respective interest rate decisions, with both central banks opting to keep rates unchanged. However, they delivered contrasting messages that had different impacts on the financial markets. Fed Chairman Jerome Powell’s dovish remarks supported a rally for the GBPUSD pair, while the Governor of the Bank of England resisted any moves to soften monetary policy.
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