GBP/USD holds below 1.2700 on firmer US Dollar, higher US yields

FXStreet
Updated May 30, 2024 01:45
Mitrade

■  GBP/USD trades softer around 1.2695 on the firmer USD on Thursday. 

■  Investors await the US Q1 GDP on Thursday, which is expected to expand by 1.3%. 

■  A softer UK inflation outlook triggered the rate cut expectation from the BoE. 


The GBP/USD pair weakens to 1.2695 during the early Asian session on Thursday. The downtick of the pair is supported by the stronger US Dollar (USD) amid the higher US yields and lower bets of the Federal Reserve (Fed) rate cut in September.

In recent weeks, Fed officials delivered a cautious tone on the inflation outlook, prompting traders to lower their bets on an easing cycle this year. Markets are pricing in a 50% chance that the Fed will hold interest rates in September, according to the CME FedWatch Tool. The combination of the Fed’s cautious stance and the stronger US economic data provide some support for the Greenback in the previous sessions. 

Investors will take more cues from the second estimate of the US Gross Domestic Product (GDP) for Q1 2024 on Thursday, which is expected to grow 1.3%. If the report shows a stronger-than-expected reading, this might further boost the USD and create a headwind for GBP/USD.  Apart from this, the US weekly Initial Jobless Claims, Goods Trade Balance, and Pending Home Sales are due later in the day. Also, the Fed’s Raphael Bostic, John Williams, and Lorie Logan are scheduled to speak.

On the GBP’s front, the growing speculation that the Bank of England (BoE) will start cutting interest rates in its August meeting due to a softer UK inflation outlook weighs on the Cable. The International Monetary Fund (IMF) expected two to three rate cuts from the BoE. In the absence of top-tier economic data releases from the UK, election speculation may influence the Pound Sterling (GBP). Concerns about political uncertainty might undermine the GBP and cap the upside for the pair in the near term. 


GBP/USD


Overview
Today last price 1.2697
Today Daily Change -0.0065
Today Daily Change % -0.51
Today daily open 1.2762
 
Trends
Daily SMA20 1.2627
Daily SMA50 1.2583
Daily SMA100 1.2634
Daily SMA200 1.2541
 
Levels
Previous Daily High 1.2801
Previous Daily Low 1.2754
Previous Weekly High 1.2761
Previous Weekly Low 1.2676
Previous Monthly High 1.2709
Previous Monthly Low 1.23
Daily Fibonacci 38.2% 1.2772
Daily Fibonacci 61.8% 1.2783
Daily Pivot Point S1 1.2744
Daily Pivot Point S2 1.2726
Daily Pivot Point S3 1.2697
Daily Pivot Point R1 1.279
Daily Pivot Point R2 1.2819
Daily Pivot Point R3 1.2837

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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