- GBP/USD trades in negative territory near 1.2535 on a stronger USD.
- US ISM Services PMI came in at 53.4 in January vs. 50.5 prior.
- BoE’s Pill said rates will come down this year, but only with progress on inflation.
The GBP/USD pair drops to the multi-week low of 1.2518 and rebounds to 1.2535 during the early Asian session on Tuesday. The expectations of an early Federal Reserve (Fed) interest rate cut fade, and this lifts the US Dollar (USD) across the board. Meanwhile, the US Dollar Index (DXY) holds above 104.40 after retracing from a yearly high of 104.60.
The Institute for Supply Management (ISM) reported on Monday that the US ISM Services PMI climbed to 53.4 in January from 50.5 in December. The Services PMI data, along with the labor market data, suggested that the fourth quarter's economic growth momentum carried over into the new year and reduced the possibility of an interest rate cut in March.
The Bank of England (BoE) Chief Economist Huw Pill stated on Monday that interest rates could drop this year as a reward to the economy for bringing inflation down. Pill added that monetary policy is now on a different path than it was over the course of last year, and rates will only decline as long as progress continues with inflation.
Later on Monday, the UK BRC Retail Sales and S&P Global/CIPS Construction PMIs for January will be due. In the absence of top-tier economic data released from the UK and US, risk sentiment will likely play a pivotal role for GBP/USD.
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 gathers fresh upside traction and approaches 1.0580
Following an early dip to a new 2024 low at 1.0495, EUR/USD manages to regain some balance and retests the area of daily peaks near 1.0580 as the US Dollar's initial uptick seems to have run out of steam.
GBP/USD reclaims the 1.2700 barrier and above
In line with the rest of its risk-related peers, GBP/USD leaves behind the initial drop to multi-month lows near 1.2630 and attempts a move beyond 1.2700 the figure amidst renewed weakness in the Greenback.
Gold trims early losses hovers around $2,575
The loss of momentum in the US Dollar and the retracement in US yields across the curve allow Gold prices to pick up some upside traction and revisit the $2,570 zone per ounce troy, trimming part of their early losses.
Missing crypto influencer Kevin Mirshahi found dead in Montreal Park
Authorities report that the remains of Kevin Mirshahi, a prominent crypto influencer who was abducted in June, have been found in a Montreal park. Local police informed “The Gazette” that a passerby found the grim discovery on October 30 in Île-de-la-Visitation Park.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.