GBP/USD holds positive ground above 1.2500 on weaker US Dollar, Fed rate decision looms

Source Fxstreet
Apr 29, 2024 01:49
  • GBP/USD trades on a positive note around 1.2520 amid weaker USD on Monday. 
  • The recent US PCE inflation data dialed back their expectation of when the Federal Reserve (Fed) will start cutting interest rates.
  • Investors increased their bets that the BoE will start cutting rates in June.

The GBP/USD pair holds positive ground near 1.2520 on Monday during the early Asian session. The uptick of the major pair is supported by the softer US Dollar (USD) below the 106.00 psychological mark. Investors will closely monitor the Federal Open Market Committee (FOMC) interest rate decision and Press Conference on Wednesday. 

The US Federal Reserve (Fed) is expected to leave the interest rate unchanged in its current 5.25%–5.5% range on Wednesday. The US economy remains strong, and inflation has started to turn higher. On Friday, the US Bureau of Economic Analysis showed the Core Personal Consumption Expenditures (PCE) Price Index rose 2.8% YoY in March. These reports have triggered speculation that the first cut might not come until September. 

The Fed policymakers noted that rate cuts are not coming in the next several months as inflation was stickier than expected and remains above the Fed’s 2% target. The higher-for-longer stance from the US central bank might provide some support to the Greenback and cap the downside of the GBP/USD pair. 

On the other hand, investors raise their bets that the Bank of England (BoE) will start lowering borrowing costs in its June meeting. The BoE Governor Andrew Bailey said during the press conference after the last monetary policy meeting that two or three rate cuts this year are not "unreasonable." A dovish shift in the BoE remarks might lead to a weaker Pound Sterling (GBP) and create a headwind for the pair. 

GBP/USD

Overview
Today last price 1.2522
Today Daily Change 0.0028
Today Daily Change % 0.22
Today daily open 1.2494
 
Trends
Daily SMA20 1.2517
Daily SMA50 1.2624
Daily SMA100 1.265
Daily SMA200 1.2557
 
Levels
Previous Daily High 1.2542
Previous Daily Low 1.2449
Previous Weekly High 1.2542
Previous Weekly Low 1.23
Previous Monthly High 1.2894
Previous Monthly Low 1.2575
Daily Fibonacci 38.2% 1.2485
Daily Fibonacci 61.8% 1.2507
Daily Pivot Point S1 1.2448
Daily Pivot Point S2 1.2402
Daily Pivot Point S3 1.2355
Daily Pivot Point R1 1.2541
Daily Pivot Point R2 1.2588
Daily Pivot Point R3 1.2633

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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