- GBP/USD trades with a mild bearish bias near 1.2740 amid firmer US Dollar on Wednesday.
- The US Fed is anticipated to keep rates on hold at its June monetary policy meeting.
- The weaker UK employment data put pressure on the BoE's potential interest rate path.
The GBP/USD pair trades with mild losses around 1.2740 during the early Asian session on Wednesday. Extended gains in the US Dollar (USD) amid the cautious mood weigh on the major pair. Investors will closely watch the US Consumer Price Index (CPI) inflation data, just few hours before the FOMC meeting.
The stronger US employment report last week dampened the expectation that the US Federal Reserve (Fed) will start cutting interest rates in September. Nonetheless, a softer-than-expected inflation report might influence Fed Chair Jerome Powell to maintain his stance of three interest rate cuts by the end of the year. This, in turn, might exert selling pressure on the Greenback. The US CPI figure is expected to show an increase of 3.4% YoY in May, while the core CPI is estimated to rise 3.5% YoY in the same report period.
The Fed is widely expected to keep rates on hold at its June meeting on Wednesday. Traders will take more cues from the latest interest rate projections about how many times the Fed expects to ease rates in 2024. According to the CME FedWatch Tool, the markets are expecting just one to two cuts in 2024.
On the other hand, the UK labor market has been contracting for the fourth time in a row. The Employment Change declined by 140K in the three months to April, compared to a 177K decrease in the previous reading. Meanwhile, the ILO Unemployment Rate increased to 4.4% in the three months to April from the previous reading of 4.3%, worse than the market expectation of 4.3%. The number of people claiming jobless benefits rose by 50.4K in May from an increase of 8.4K in April. The Pound Sterling (GBP) has edged lower after the weaker reports, as the Unemployment Rate and May Claimant data showed a worrying picture of the UK labour market condition.
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 holds above 1.0850 after EU inflation data
EUR/USD trades marginally higher on the day above 1.0850 in the European session on Thursday. The data from the Eurozone showed that the annual HICP inflation rose to 2% in October from 1.7% in September, helping the Euro hold its ground.
USD/JPY falls below 152.50 as markets assess BoJ policy decisions
USD/JPY stays under bearish pressure and trades below 152.50 on Thursday. The Bank of Japan (BoJ) left its policy setting unchanged but Governor Ueda noted that the impact of foreign exchange rate on prices had become larger than in the past.
Gold holds near $2,780, looks to US PCE Price Index for fresh impetus
Gold stays in a consolidation phase after setting a new record-high of $2,790. US political jitters and Middle East tensions might continue to act as a tailwind for the XAU/USD. Traders keenly await the release of the US PCE Price Index before placing fresh directional bets.
Uniswap Price Forecast: Technical outlook suggests a bullish breakout ahead
Uniswap is trading slightly below $8 on Thursday after rejecting a key resistance level on Wednesday. A successful close above this threshold could indicate a rally for the decentralized exchange, bolstered by technical indicators showing a bullish crossover pointing to potential upward momentum.
German economy surprises in the third quarter
The German economy avoided a technical recession in the third quarter, showing unexpected growth. However, this does not change the fact that the economy remains stuck in stagnation.
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.