- GBP/USD trades sideways near 1.2626 as traders await the key data.
- The markets now anticipate that the Fed will begin easing rates in May or June.
- BoE’s Bailey said the central bank is seeing signs of an upturn in the UK economy.
- Investors will monitor the UK labour market data, US inflation data for fresh catalysts.
The GBP/USD pair consolidates in a narrow trading band above the 1.2600 mark during the early Asian session on Tuesday. The UK labor market and US inflation report will be in the spotlight later in the day. These events could trigger volatility in the market. At press time, GBP/USD is trading at 1.2626, down 0.02% on the day.
Federal Reserve (Fed) Chair Jerome Powell said last month that the central bank is unlikely to start cutting rates in March, and investors now anticipate that the Fed will begin easing rates in May or June. Several officials said more evidence of inflation data is needed before lowering the rates. The US January Consumer Price Index (CPI) could offer hints about the potential timeline of rate cuts.
On Monday, Bank of England (BoE) governor Andrew Bailey expressed optimism regarding the UK economy and downplayed the importance of forthcoming data that some analysts projected the country entered a technical recession at the end of last year. BoE policymaker Sarah Breeden said last week that the central bank has shifted from tightening rates to thinking about when they might come down as the recent falls in UK inflation have changed the BoE’s outlook. However, BoE policymakers Jonathan Haskel and Catherine Mann emphasized the upside risks to price pressures and supported the case for keeping interest rates high for longer.
The UK labour market data, including Employment Change, ILO Unemployment Rate, and Claimant Count Change will be due on Tuesday. On the US docket, the CPI inflation data for January will be released. The attention will shift to the UK Producer Price Index (PPI) and Gross Domestic Product (GDP) later this week. These events could give a clear direction to the major pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.