GBP/USD settles ahead of central bank double header
GBP/USD snapped a near-term losing streak, pumping the breaks and holding steady near the 1.3300 handle to kick off a fresh trading week. Cable remains down from recent multi-year highs, but price action has pushed into a holding pattern ahead of key showings from both the Federal Reserve (Fed) and the Bank of England (BoE).
The Fed is broadly expected to keep interest rates on hold for the time being, a move that is likely to draw more fire from the Trump administration which remains staunchly determined to try and squeeze early rate cuts out of Fed Chair Jerome Powell. Labor and inflation figures remain largely on-balance, with roughshod and opaque trade policies out of the White House shooting its own hopes for rate cuts in the foot as the Fed remains committed to its mandate of keeping unemployment and price volatility in check.
Despite the Fed’s all but assured rate hold on the cards this week, Fed head Powell’s words will take on additional weight for investors following the Fed’s rate call on Wednesday. Markets are still hoping for a pivot into a fresh rate cutting cycle, and traders will be sniffing out any signs of dovishness from Fed policymakers.
On the UK side, the BoE is broadly expected to deliver another quarter-point rate cut on Thursday. The BoE’s Monetary Policy Committee (MPC) is expected to vote 9-to-1 in favor of a 25 bps rate trim.
Source: Fxstreet
