GBPUSD bulls surrender as the price rally comes to a screening halt. On Monday, the GBP/USD currency pair fell from its one-month high as traders cashed out on the rally of the past three days. Market studies indicated that the market was overbought, leading investors to exit long positions before this week’s economic data releases. Tuesday will see the release of UK jobs and earnings data and US CPI data, followed by the Federal Reserve rate decision on Wednesday. According to economists’ forecasts, annualized inflation in the US is expected to drop to 4.1% in May, while core inflation is anticipated to decrease to 5.3% in May. This could be an indication that the Fed will maintain its current rate during its June policy meeting.
Given the news, the current pullback may be positioning for a fresh push higher should the Fed’s decision be dovish. As the market awaits the Fed’s decision, traders will be watching for any potential trends that could influence the currency pair. Overall, the GBP/USD currency pair is expected to remain volatile this week as traders react to the release of economic data. With the Fed rate decision looming, the currency pair will likely experience increased volatility in the coming days. Investors and traders should exercise caution and ensure they are up-to-date with the latest news before making any decisions.
BOE Feels Pressure
The GBP/USD pair has been on a downward trajectory, dropping to 1.2560 following the rebound of the US Dollar Index to 103.50. Investors are closely monitoring the Federal Reserve’s interest rate decision and US inflation data, as the Fed is expected to maintain a neutral interest rate policy, with a 75% probability of this occurring according to the CME Fedwatch tool. The Bank of England is also under increased pressure as it struggles to balance high inflation with rising earnings. Andrew Bailey, Governor of the BoE, is expected to give a closely watched speech as investors await further details on the bank’s policy outlook.
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