- GBP/USD continues to draw support from some follow-through USD profit-taking.
- Reduced bets for aggressive Fed rate cuts and BoE uncertainty might cap the upside.
- Traders also seem reluctant ahead of the BoE’s Monetary Policy Report Hearings.
The GBP/USD pair attracts buyers for the second straight day on Tuesday amid a modest US Dollar (USD) downtick and climbs back closer to the 1.2700 mark during the Asian session. Spot prices, however, lack bullish conviction as investors opt to wait for the Bank of England's (BoE) Monetary Policy Report Hearings before placing aggressive directional bets.
BoE Governor Andrew Bailey and several MPC members will testify on inflation and the economic outlook before Parliament's Treasury Committee. This will play a key role in influencing market expectations about potential interest rate adjustments going forward, which, in turn, will drive the British Pound (GBP) and provide some meaningful impetus to the GBP/USD pair.
The focus will then shift to the latest UK consumer inflation figures on Wednesday. In the meantime, softening US Treasury bond yields prompts some follow-through US Dollar (USD) profit-taking and drags it away from the year-to-date (YTD) top set last week. This, along with a positive risk tone, undermines the safe-haven buck and acts as a tailwind for the GBP/USD pair.
Any meaningful USD depreciation, however, seems elusive in the wake of expectations that US President-elect Donald Trump's policies will likely rekindle inflationary pressures and limit the scope for further rate cuts by the Federal Reserve (Fed). This should keep the US bond yields elevated and favors the USD bulls, which, in turn, might cap gains for the GBP/USD pair.
Moreover, the uncertainty concerning the BoE's path forward on interest rates might contribute to keeping a lid on spot prices. Hence, it will be prudent to wait for strong follow-through buying before confirming that the GBP/USD pair has bottomed out and positioning for any meaningful recovery from sub-1.2600 levels, or a multi-month trough touched last week.
Economic Indicator
BoE Monetary Policy Report Hearings
The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration and policy of HM Treasury, HM Revenue & Customs, and associated public bodies, including the Bank of England and the Financial Services Authority.
Read more.Next release: Tue Nov 19, 2024 10:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Bank of England
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 hovers around 1.0600 with a positive bias as US Dollar faces profit-taking selling
EUR/USD remains steady with a positive bias, hovering around 1.0600 during Tuesday's Asian trading hours. The upbeat sentiment surrounding the pair is likely driven by a softer US Dollar (USD), as profit-taking follows its recent rally.
GBP/USD trades with mild positive bias on softer USD, remains below 1.2700 mark
The GBP/USD pair attracts buyers for the second straight day on Tuesday amid a modest US Dollar (USD) downtick and climbs back closer to the 1.2700 mark during the Asian session. Spot prices, however, lack bullish conviction as investors opt to wait for the Bank of England's (BoE) Monetary Policy Report Hearings before placing aggressive directional bets.
Gold could run into sellers at $2,655 on the road to recovery
Gold price extends the recovery into Asian trading on Tuesday, reversing half the previous week’s decline. The focus remains on the upcoming speeches from US Federal Reserve (Fed) policymakers and geopolitical tensions between Russia and Ukraine.
Bitcoin could see another parabolic run following rising institutional interest
Bitcoin (BTC) began the week positively, rising over 3% above the $91K threshold on Monday. Despite the recent rise, BTC could begin another extended bullish move as top firms are increasing their Bitcoin holdings and potentially adopting it as a reserve asset.
The week ahead: Powell stumps the US stock rally as Bitcoin surges, as we wait Nvidia earnings, UK CPI
The mood music is shifting for the Trump trade. Stocks fell sharply at the end of last week, led by big tech. The S&P 500 was down by more than 2% last week, its weakest performance in 2 months, while the Nasdaq was lower by 3%. The market has now given back half of the post-Trump election win gains.
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.