GBP/USD trims a part of intraday losses, down a little below 1.3200 ahead of BoE

Source Fxstreet
  • GBP/USD attracts some dip-buyers amid expectations that the BoE will hold rates steady.
  • Rising US bond yields assist the USD to gain some follow-through traction and caps gains.
  • Bulls also seem reluctant to place aggressive bets and prefer to wait for the BoE decision.

The GBP/USD pair finds some support near the 1.3150 region on Thursday and for now, seems to have stalled its retracement slide from the 1.3300 neighborhood, or the highest level since March 2022 touched the previous day. Spot prices climb closer to the 1.3200 mark during the Asian session, albeit lack follow-through amid some follow-through US Dollar (USD) buying and currently trade with modest intraday losses. 

The US Federal Reserve (Fed) decided to kick-start the policy-easing cycle and lowered borrowing costs by 50 basis points (bps) on Wednesday, though cooled hopes for oversized rate cuts going forward. Furthermore, Fed policymakers don't see inflation returning to the 2% target before 2026, triggering a sharp recovery in the US Treasury bond yields. This, in turn, lifts the USD Index (DXY), which tracks the Greenback against a basket of currencies, to a one-week high and turns out to be a key factor exerting some downward pressure on the GBP/USD pair. 

Meanwhile, expectations that the Bank of England's (BoE) rate-cutting cycle is more likely to be slower than in the United States (US) continue to underpin the British Pound (GBP) and help limit losses for the currency pair. The UK Consumer Price Index (CPI) report released on Wednesday showed that inflation in the services sector accelerated more than expected in August. This reaffirmed bets that the BoE would hold rates steady at the end of the September policy meeting later this Thursday and warrant caution before placing bearish bets around the GBP/USD pair. 

Traders might also prefer to move to the sidelines heading into the key central bank event risk. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for the GBP/USD pair is to the upside. That said, the two-way price action witnessed over the past few days, along with the overnight failure near the 1.3300 mark, warrants some caution for bullish traders. Hence, some follow-through buying is needed to support prospects for an extension of the pair's move up from the 1.3000 psychological mark, or the monthly low touched last week. 

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Read more.

Next release: Thu Sep 19, 2024 11:00

Frequency: Irregular

Consensus: 5%

Previous: 5%

Source: Bank of England

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Ethereum (ETH) Price Closes Above $3,900 — Is a New All-Time High Possible Before 2024 Ends?Once again, the price of Ethereum (ETH) has risen above $3,900. This bounce has hinted at a further price increase for the altcoin before the end of the year.
Author  Beincrypto
Dec 17, 2024
Once again, the price of Ethereum (ETH) has risen above $3,900. This bounce has hinted at a further price increase for the altcoin before the end of the year.
placeholder
Top 3 Price Prediction: Bitcoin, Ethereum, Ripple – BTC, ETH and XRP face downside risk as bears regain control Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.
Author  FXStreet
Feb 18, Wed
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.
placeholder
USD/JPY Price Forecast: Continues to hold key support level around 152.00The USD/JPY pair trades 0.27% higher to near 153.70 during the European trading session on Wednesday.
Author  FXStreet
Feb 18, Wed
The USD/JPY pair trades 0.27% higher to near 153.70 during the European trading session on Wednesday.
placeholder
Gold rises above $4,950 as US-Iran tensions boost safe-haven demandGold price (XAU/USD) holds positive ground near $4,985 during the early Asian session on Thursday. The precious metal recovers amid shifts in geopolitical sentiment, boosting safe-haven demand.
Author  FXStreet
Yesterday 01: 29
Gold price (XAU/USD) holds positive ground near $4,985 during the early Asian session on Thursday. The precious metal recovers amid shifts in geopolitical sentiment, boosting safe-haven demand.
placeholder
Silver Price Forecast: XAG/USD rises to near $78.00 on safe-haven demandSilver price (XAG/USD) extends its gains for the second successive session, trading around $78.00 per troy ounce during the Asian hours on Thursday. The precious metal Silver receives support from rising safe-haven demand amid persistent tensions between the United States (US) and Iran.
Author  FXStreet
Yesterday 06: 37
Silver price (XAG/USD) extends its gains for the second successive session, trading around $78.00 per troy ounce during the Asian hours on Thursday. The precious metal Silver receives support from rising safe-haven demand amid persistent tensions between the United States (US) and Iran.
Related Instrument
goTop
quote