GBP/USD rises to near 1.2750 despite diminishing expectations for Fed rate cuts
Trending Articles- Australian Dollar remains stronger following PBoC interest rate decision
- Forex Today: US Dollar extends slide, Gold surges past $4,300
- Meme Coins Price Prediction: Dogecoin, Shiba Inu, Pepe flash bearish potential
- Ethereum Price Flashes 3 Bullish Signals as Whales Scoop Up $600 Million in ETH
- Japanese Yen strengthens on safe-haven flows, USD/JPY tests 150.00 amid weaker USD
- WTI drifts higher to near $58.40 as Trump says India will stop importing Russian oil
■GBP/USD extends gains due to risk-on sentiment after UoM's 5-year Consumer Inflation Expectations.
■CME FedWatch Tool suggests the likelihood of the Fed’s rate cut in September has decreased to 44.9% from 49.0% a week earlier.
■UK's softer inflation has tempered expectations of BoE’s rate cut in June.
GBP/USD advances for the second successive session, trading around 1.2740, near two-month highs, during the Asian hours on Monday. The appreciation in the GBP/USD could be attributed to the risk-on sentiment, despite diminishing expectations for Federal Reserve interest rate cuts. It is worth noting that the UK market will be closed due to the Spring Bank Holiday and the US market will be closed due to the Memorial Day bank holiday on Monday.
The University of Michigan's 5-year Consumer Inflation Expectations for May on Friday. It eased slightly to 3.0%, below the forecasted 3.1%. Despite the upward revision of the Consumer Sentiment Index to 69.1 from a preliminary reading of 67.4, it still marked the lowest level in six months. These figures likely contributed to strengthening investors’ sentiment regarding potential rate cuts by the Federal Reserve. This has weakened the Greenback and underpinned the GBP/USD pair.
According to the CME FedWatch Tool, the probability of the Federal Reserve implementing a 25 basis-point rate cut in September has decreased to 44.9% from 49.0% a week earlier.
In the United Kingdom (UK), traders have digested lower-than-anticipated Retail Sales data released on Friday. April saw a notable 2.3% decline in the monthly volume of sales of goods by retailers, far worse than the expected 0.4% downturn. On an annual basis, sales dipped by 2.7%, compared to the expected 0.2% decrease. Meanwhile, GfK Consumer Confidence softened to a reading of -17 in May, slightly better than the anticipated -18 reading and the previous -19.
Furthermore, the UK's annual inflation rate has moderated, edging closer to the Bank of England's (BoE) target of 2%. This moderation has tempered expectations of a rate cut in June among investors, potentially bolstering support for the Pound Sterling (GBP).
Read more
* 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.
