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Source: Newsmaker.id
The pound held near six-month highs against the US dollar during Tuesday's trading (August 25), supported by improved risk sentiment stemming from geopolitical developments in the Middle East. GBP/USD traded around 1.3638—not far from the six-month peak in the 1.3675 area—as investors awaited key US data and a speech by Fed Chair Kevin Warsh at Jackson Hole.
Market sentiment improved after Pakistan's Army Chief, Munir, visited Iran and proposed lifting the US naval blockade in exchange for reopening the Strait of Hormuz and halting attacks by Iran-allied groups. Iranian officials described the visit as productive, noting that results would soon be visible. Easing geopolitical concerns helped temper safe-haven demand for the dollar.
The Dollar Index (DXY) remained stable around 98.93, edging down approximately 0.04%. US data presented mixed signals. July Building Permits rose 4.3% month-on-month to 1.433 million, while the four-week average for ADP Employment Change increased to 11.75 thousand. Conversely, the Conference Board Consumer Confidence index fell to 89.4, missing the forecast of 90.2.
Regarding monetary policy, Boston Fed President Susan Collins maintained a hawkish tone, assessing that inflation remains too high and price stability continues to be a concern. She also noted that the labor market remains consistent with conditions near full employment and that economic growth is close to trend.
The pound received additional support from UK interest rate expectations. Money markets continue to price in at least one Bank of England rate hike before year-end, with a full hike priced in for the December 17 meeting. These expectations helped limit selling pressure on sterling.
Newsmaker Analysis: The GBP/USD bias remains bullish-consolidative as long as it holds above the 1.3600 area. A breakout above 1.3675 could open the way to higher levels, though the greatest risk stems from Jackson Hole. Kevin Warsh's hawkish tone has the potential to boost the dollar and weigh on the pound, whereas a softer signal could open the door for sterling to extend its rally.
Source: Newsmaker.id