Select Language

GBP/USD trims a part of intraday losses, down a little below 1.3200 ahead of BoE

Breaking news

GBP/USD trims a part of intraday losses, down a little below 1.3200 ahead of BoE

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.09.19 12:01
GBP/USD trims a part of intraday losses, down a little below 1.3200 ahead of BoE

update 2024.09.19 12:01

  • GBP/USD attracts some dip-buyers amid expectations that the BoE will hold rates steady.
  • Rising US bond yields assist the USD to gain some follow-through traction and caps gains.
  • Bulls also seem reluctant to place aggressive bets and prefer to wait for the BoE decision.

The GBP/USD pair finds some support near the 1.3150 region on Thursday and for now, seems to have stalled its retracement slide from the 1.3300 neighborhood, or the highest level since March 2022 touched the previous day. Spot prices climb closer to the 1.3200 mark during the Asian session, albeit lack follow-through amid some follow-through US Dollar (USD) buying and currently trade with modest intraday losses. 

The US Federal Reserve (Fed) decided to kick-start the policy-easing cycle and lowered borrowing costs by 50 basis points (bps) on Wednesday, though cooled hopes for oversized rate cuts going forward. Furthermore, Fed policymakers don't see inflation returning to the 2% target before 2026, triggering a sharp recovery in the US Treasury bond yields. This, in turn, lifts the USD Index (DXY), which tracks the Greenback against a basket of currencies, to a one-week high and turns out to be a key factor exerting some downward pressure on the GBP/USD pair. 

Meanwhile, expectations that the Bank of England's (BoE) rate-cutting cycle is more likely to be slower than in the United States (US) continue to underpin the British Pound (GBP) and help limit losses for the currency pair. The UK Consumer Price Index (CPI) report released on Wednesday showed that inflation in the services sector accelerated more than expected in August. This reaffirmed bets that the BoE would hold rates steady at the end of the September policy meeting later this Thursday and warrant caution before placing bearish bets around the GBP/USD pair. 

Traders might also prefer to move to the sidelines heading into the key central bank event risk. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for the GBP/USD pair is to the upside. That said, the two-way price action witnessed over the past few days, along with the overnight failure near the 1.3300 mark, warrants some caution for bullish traders. Hence, some follow-through buying is needed to support prospects for an extension of the pair's move up from the 1.3000 psychological mark, or the monthly low touched last week. 

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Read more.

Next release: Thu Sep 19, 2024 11:00

Frequency: Irregular

Consensus: 5%

Previous: 5%

Source: Bank of England

 


Date

Created

 : 2024.09.19

Update

Last updated

 : 2024.09.19

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Mexican Peso stays flat following Fed rate cut, eyes on Banxico

The Mexican Peso remained unchanged against the US Dollar during the North American session on Thursday after the Federal Reserve (Fed) lowered interest rates for the first time in four years.
New
update2024.09.20 01:24

EUR/GBP Price Analysis: Technical outlook favors the downside as selling pressure mounts

Thursday's session saw the EUR/GBP slightly decline by 0.20% below 0.8400.
New
update2024.09.20 01:00

EUR/JPY surges on sentiment improvement yet struggles at 160.00

The Euro rallied sharply against the Japanese Yen on Thursday amid a scarce economic docket.
New
update2024.09.19 23:13

NZD/USD struggles to seize two-week high of 0.6270 as US Dollar bounces back

The NZD/USD pair gains significantly by more than 0.5% but struggles to seize the two-week high of 0.6270 in Thursday's North American session.
New
update2024.09.19 23:00

BoE: There is a premium on patience - Rabobank

Bank of England (BoE) left the policy unchanged, as expected, at 5%, in a 8-1 split vote, Rabobank's Senior Macro Strategist Stefan Koopman notes.
New
update2024.09.19 23:00

Correlation between Gold and the broad USD grows - TDS

Price action in Gold is telling you that macro fund positioning is extreme, TDS commodity analyst Daniel Ghali notes.
New
update2024.09.19 22:53

The Fed joins the easing cycle with a bang - TDS

The Fed joins the global easing cycle, and the focus now shifts to the relative pace of cuts, TDS macro analysts note.
New
update2024.09.19 22:34

GBP/USD Price Forecast: Touches new yearly high but diverging with momentum

GBP/USD has rallied to a new high for 2024 on Thursday; the pair reached 1.3314 during trading on Thursday, its highest price for the year.
New
update2024.09.19 22:30

AUD/USD Price Forecast: Posts new high for 2024 but diverging bearishly with RSI

AUD/USD reaches a new high for 2024 at 0.6839 on Thursday, after the leg higher that began at the September 11 lows extends.
New
update2024.09.19 22:11

Bailey speech: Optimistic UK interest rates will fall further

Bank of England (BoE) Governor Andrew Bailey said on Thursday that he is optimistic that interest rates in the UK will fall but added that they need more evidence, per Reuters.
New
update2024.09.19 22:08

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel