Mon. May 20th, 2024

GBP/USD pair rebounds from lows since November amid expectations of the Fed delaying rate cuts.

GBP/USD United Kingdom pair rebounds from lows since November amid expectations of the Fed delaying rate cuts.GBP/USD pair rebounds from lows since November amid expectations of the Fed delaying rate cuts.

GBP/USD: Dollar (USD), trading around 1.2460 during Asian hours on Monday. The US Dollar (USD) maintains its position below its peak since November 2023, potentially restricting the upward momentum of the GBP/USD pair.

  • GBP/USD rebounds from lows since November amid expectations of the Fed delaying rate cuts.
  • The escalated Middle-East tension could bolster the demand for the US Dollar.
  • BoE could reduce policy rates to around 4.75% by 2024, down from the current rate of 5.25%.

US Dollar Index (DXY) hovers around 106.00, with the 2-year and 10-year yields on US Treasury bonds standing at 4.91% and 4.55%, respectively, by the press time. The elevated US yields may offer support to bolster the US Dollar (USD).

Meanwhile, the Federal Reserve (Fed) seems to reevaluate its monetary easing plans due to ongoing US inflation and robust macroeconomic indicators. According to the CME FedWatch Tool, there has been a notable increase in the likelihood of interest rates remaining unchanged at the June meeting, rising to 63.5% from 46.8% the previous week.

Investors will likely observe Federal Reserve Bank of Kansas President Lorie Logan while participating in a panel discussion at the BoJ-IMF conference on Monday. Furthermore, US Retail Sales figures will be eyed later in the North American session.

On the other side, on Friday, the Pound Sterling (GBP) dipped against the US Dollar to its lowest level since November, reaching 1.2426. Heightened tensions in the Middle East likely prompted traders to seek refuge in the US Dollar.

However, market forecasts for interest rate cuts by the Bank of England (BoE) have been adjusted, with the policy rate now expected to decline to around 4.75% by the end of 2024, down from the current rate of 5.25%. This marks a shift from the previous expectation of a drop to 4.5% by December.

BoE’s policymaker, Megan Greene emphasized that rate cuts in the United Kingdom (UK) should still be considered distant, pointing to a greater risk of persistent inflation in the UK compared to the US. Additionally, traders will likely pay close attention to the speech by Sarah Breeden, BoE’s Deputy Governor for Financial Stability, at the Innovate Finance Global Summit 2024 on Monday.

GBP/USD

Overview
Today last price1.2461
Today Daily Change0.0012
Today Daily Change %0.10
Today daily open1.2449
Trends
Daily SMA201.263
Daily SMA501.2655
Daily SMA1001.2669
Daily SMA2001.2584
Levels
Previous Daily High1.2559
Previous Daily Low1.2427
Previous Weekly High1.2709
Previous Weekly Low1.2427
Previous Monthly High1.2894
Previous Monthly Low1.2575
Daily Fibonacci 38.2%1.2477
Daily Fibonacci 61.8%1.2508
Daily Pivot Point S11.2398
Daily Pivot Point S21.2346
Daily Pivot Point S31.2266
Daily Pivot Point R11.253
Daily Pivot Point R21.261
Daily Pivot Point R31.2661

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