GBP/USD holds steady above 1.2600, bulls seem non-committed despite softer USD
The GBP/USD pair struggles to capitalize on the previous day's goodish bounce of around 50 pips from the 1.2570 region and oscillates in a narrow band during the Asian session on Friday. Spot prices currently trade near the top end of the weekly range, around the 1.2620 area, and draw support from a modest US Dollar (USD) downtick.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, extends its sideways consolidative price move as traders seek more clarity about the timing and the pace of interest rate cuts by the Federal Reserve (Fed). Apart from this, the underlying bullish tone across the global equity markets further undermines the safe-haven Greenback and acts as a tailwind for the GBP/USD pair, though the lack of follow-through buying warrants caution before positioning for further gains. Read more...
GBP/USD loses ground following strong labor market data from the US
On Thursday, the GBP/USD pair declined towards the 1.2615 level showing slight losses with upbeat US labor market figures benefiting the Greenback with Jobless claims from the week ending on February 3 coming in lower than expected. However, the Bank of England (BoE) holds a somewhat similar stance as the Federal Reserve (Fed) in delaying rate cuts so the losses may be limited.
Moreover, markets are predicting 100 bps rate cuts over the next 12 months, starting in June while investors are seeing higher 125 bps of easing in 2024 from the Fed indicating that the losses from the Pound may be limited. However, it will all come down to the incoming data as they will shape the expectations of the next decisions. Next in line, next Tuesday, the US will release January’s inflation figures while the UK will reveal key labor market figures which may likely set the pace for the pair for the next sessions. Read more...
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