GBP/USD Price Analysis: Holds steady above mid-1.2600s, not out of the woods yet
The GBP/USD pair is seen oscillating in a range during the Asian session on Friday and consolidating the previous day's post-Bank of England (BoE) decline to over a one-month low. Spot prices currently trade just above mid-1.2600s and seem vulnerable to prolonging the recent retracement slide from a multi-month peak, around the 1.2860 region touched last week.
The markets started pricing in a greater chance of a rate cut in August after the BoE Governor Andrew Bailey said on Thursday that it was "good news" that official figures had shown inflation was back at its 2% target. This might continue to undermine the British Pound (GBP) ahead of the UK election on July 4 and validate the negative outlook for the GBP/USD pair. The US Dollar (USD), on the other hand, struggles to capitalize on the previous day's strong move up amid expectations for an imminent start of the Federal Reserve's (Fed) rate-cutting cycle in September. This, in turn, is seen lending some support to the currency pair. Read more...
GBP/USD falls into familiar lows as Friday looms with key UK data print
GBP/USD is poised for a bumper Friday session. Key UK data is due during the European market session, and US Purchasing Managers Index (PMI) activity surveys set to wrap up the trading week. The Bank of England (BoE) held rates at 5.25% this week, with a stubbornly tepid stance on rate cuts that deflated broad-market rate cut expectations.
The BoE was widely expected to keep interest rates unchanged in June. However, there was a focus on recent services inflation and a vague aim to keep inflation "sustainably" lower, which has left the value of the Sterling uncertain. Additionally, the BoE expressed a willingness to maintain restrictive policies for as long as necessary and emphasized that although the UK labor market is looser than before, it still remains historically tight. Read more...
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