GBP/USD consolidates around 1.3200, looks to US Retail Sales for short-term impetus
The GBP/USD pair oscillates in a narrow trading band just above the 1.3200 mark during the Asian session on Tuesday and consolidates the previous day's strong move up to over a one-week high. Investors opt to move to the sidelines ahead of the key central bank event risks – the highly-anticipated two-day FOMC meeting starting this Tuesday and the Bank of England (BoE) policy update on Thursday.
The Federal Reserve (Fed) is scheduled to announce its decision on Wednesday and the markets are currently pricing in over a 60% chance of an oversized 50-basis points interest rate cut amid signs of easing inflationary pressures. This keeps the US Treasury bond yields depressed at one or two-year lows and fails to assist the US Dollar (USD) to register any meaningful recovery from the YTD low, which, in turn, is seen acting as a tailwind for the GBP/USD pair. Read more...
GBP/USD rallies on Fed rate cut bets
GBP/USD clipped into the high end on a quiet Monday, kicking off the new trading week with a fresh bullish bid back over the 1.3200 handle. Investor sentiment is holding steady on the high side as markets gear up for a hefty central bank showing this week, with a widely anticipated Fed rate cut and another showing from the Bank of England (BoE).
US Retail Sales are slated for an update on Tuesday, but the key datapoint that would normally drive some level of volatility is not expected to move the needle this week unless the print comes in wildly out of alignment with forecasts. MoM US Retail Sales growth in August is expected to ease back to 0.2% from July’s 1.0%, while core MoM Retail Sales (excluding automotive purchases) are expected to tick down to 0.3% from 0.4%. Read more...
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