- The Pound Sterling rallies against the US Dollar after Fed Powell communicated a dovish guidance on interest rates.
- Jerome Powell vows to support labor market strength.
- Investors await BoE Bailey's speech at the Jackson Hole Symposium.
The Pound Sterling (GBP) extends its winning streak for a seventh trading session against the US Dollar (USD) on Friday. The GBP/USD pair posts a fresh two-year high at 1.3200 as the US Dollar (USD) slides toward a year-to-date low after a dovish guidance on interest rates by Federal Reserve (Fed) Chair Jerome Powell in the Jackson Hole (JH) Symposium.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, dips below the crucial support of 101.00 and is declining towards the annual low of 101.60. At the JH event, Fed Powell admitted the need to reduce interest rates as the balance of risks has now leaned to employment, given that he is confident that inflation remains on track to return to the bank's target of 2%. Jerome Powell didn't commit to a preset easing path but confirmed sooner rate cuts by saying, "The time has come for policy to adjust."
Meanwhile, other policymakers at the JH event also cited a dovish interest rate guidance. Philadelphia Fed Bank President Patrick Harker said in an interview on Thursday that the central bank should focus more on a steady course of easing, which should be started from September, rather than the size of policy action, reported Reuters.
Separately, Boston Fed Bank President Susan Collins also showed support for interest rate cuts in September. Collins remained confident about the Fed achieving its goals without triggering a recession.
Daily digest market movers: Pound Sterling gains ahead of BoE Bailey's speech at Jackson Hole
- The Pound Sterling performs strongly against its major peers, except Asia-Pacific currencies, on Friday. The British currency gains on firm speculation that the Bank of England’s (BoE) policy-easing cycle will be slower than that of other major central banks. Robust expectations for a slower BoE policy-normalization process are backed by a strong United Kingdom (UK) economic outlook and still high wage growth.
- Flash UK S&P Global/CIPS PMI data for August, released Thursday, showed that the overall business activity rose at a faster pace to a four-month high at 53.4, driven by a strong expansion in manufacturing as well as the services sector. The report also signaled a sharp reduction in the backlog of work and positive sentiment towards the business outlook that points to strong job creation.
- These strong economic prospects, however, are unlikely to ease market speculation of one more interest rate cut by the BoE this year as input prices in the service sector eased to their lowest level in just over three-and-a-half years in August. This is a relief for BoE policymakers as they appeared uncomfortable in cutting interest rates while inflation in the service sector remains elevated.
- Meanwhile, investors await BoE Governor Andrew Bailey’s speech at the Jackson Hole (JH) Symposium, which is scheduled at 19:00 GMT. Andrew Bailey is expected to provide fresh cues about whether the BoE will cut interest rates in September.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.54% | -0.83% | -0.67% | -0.72% | -1.07% | -1.31% | -0.06% | |
| EUR | 0.54% | -0.29% | -0.13% | -0.18% | -0.54% | -0.54% | 0.47% | |
| GBP | 0.83% | 0.29% | 0.15% | 0.10% | -0.26% | -0.24% | 0.51% | |
| JPY | 0.67% | 0.13% | -0.15% | -0.05% | -0.41% | -0.43% | 0.36% | |
| CAD | 0.72% | 0.18% | -0.10% | 0.05% | -0.36% | -0.36% | 0.41% | |
| AUD | 1.07% | 0.54% | 0.26% | 0.41% | 0.36% | 0.00% | 0.75% | |
| NZD | 1.31% | 0.54% | 0.24% | 0.43% | 0.36% | -0.01% | 0.75% | |
| CHF | 0.06% | -0.47% | -0.51% | -0.36% | -0.41% | -0.75% | -0.75% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Technical Analysis: Pound Sterling delivers Rising Channel breakout
The Pound Sterling refreshes more-than-two-year high near 1.3200. The GBP/USD pair strengthens after delivering a breakout of the Rising Channel chart pattern, on a daily timeframe, in which each pullback is considered a buying opportunity by market participants. All short-to-long Exponential Moving Average (EMA) are sloping higher, suggesting that the overall trend is bullish.
The 14-period Relative Strength Index (RSI) oscillates in the bullish range of 60.00-80.00, suggesting a strong upside momentum. Still, it has reached overbought levels at around 70.00, increasing the chances of a corrective pullback. On the downside, the psychological level of 1.3000 will be the crucial support for the Pound Sterling bulls.
Economic Indicator
Jackson Hole Symposium
The Jackson Hole Economic Policy Symposium is an annual symposium sponsored by the Federal Reserve Bank of Kansas City since 1978, and held in Jackson Hole, Wyoming, since 1981. It is a forum for central bankers, policy experts and academics to come together to focus on a topic.
Read more.Last release: Fri Aug 23, 2024 00:00
Frequency: Irregular
Actual: -
Consensus: -
Previous: -
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
Australian Dollar steady as markets asses minor US data
The AUD/USD regained positive traction on Thursday following the overnight pullback from a one-week top. A softer US Dollar and a positive risk tone benefited the Aussie, as well as the Reserve Bank of Australia’s (RBA) hawkish stance.
EUR/USD: Further losses now look at 1.0450
Further strength in the US Dollar kept the price action in the risk-associated assets depressed, sending EUR/USD back to the 1.0460 region for the first time since early October 2023 prior to key releases in the real economy.
Gold faces extra upside near term
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally
Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
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.