Pound Sterling rebounds on moderate expansion in flash UK PMI
The Pound Sterling (GBP) bounces back to near 1.2970 against the US Dollar (USD) in European trading hours on Thursday after refreshing a two-month low near 1.2900 on Wednesday. The GBP/USD pair gains as the US Dollar corrects slightly, with the US Dollar Index (DXY) dropping to near 104.20. However, the outlook of the US Dollar remains firm due to a slight decline in market expectations for the Federal Reserve (Fed) to reduce interest rates in each of the remaining policy meetings this year.
According to the CME FedWatch tool, the likelihood that the central bank will reduce interest rates by 50 bps to 4.25%-4.50% by the year-end has slightly declined to 68.3% from 71.7% a week ago. The tool shows that traders have priced in a 25-bps interest rate cut in November but are not fully confident about a similar move in December. Read more...
GBP/USD Forecast: Pound Sterling could stretch higher if risk mood improves
GBP/USD holds its ground and trades modestly higher on the day above 1.2950 in the European morning on Thursday. Pound Sterling could benefit from an improving risk mood in the second half of the day and stretch higher.
The US Dollar (USD) preserved its strength on Wednesday and caused GBP/USD to drop to its weakest level since mid-August near 1.2900. The USD capitalized on rising US Treasury bond yields and found demand as a safe-haven, while Wall Street's main indexes declined sharply after the opening bell. Read more...
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