09 5月 2024, GBP/USD
Events to pay attention to today:
14:00 GMT+3. USD - BoE Interest Rate Decision
GBPUSD:
GBP/USD remains on the defensive around 1.2495 on Thursday in the early Asian session. The greenback has risen for the third consecutive day, putting pressure on the major pair. Traders are shifting into a more cautious mode ahead of the Bank of England's (BoE) interest rate decision later in the day, which is expected to be unchanged.
Fed officials gave some clues amid a lack of releases of crucial US economic data earlier this week. On Wednesday, Boston Fed President Susan Collins indicated that it will take longer than previously thought to bring inflation down to the 2% target, emphasizing that the rate is likely to remain elevated for a long time. New York Fed President John Williams and Minneapolis Fed President Neel Kashkari also stated that they favored keeping rates at current levels for longer. These remarks from Fed policymakers provide support for the US Dollar (USD) and create a tailwind for the GBP/USD pair.
Last week, the FOMC committee decided to leave interest rates unchanged. Higher than expected US inflation data kept officials from reducing borrowing costs. Financial markets expect no more than two rate cuts this year, down from six in early 2024.
On the other hand, the Bank of England is likely to leave its key rate unchanged at 5.25 per cent at its May meeting on Thursday. However, the downward trajectory of UK inflation has led to speculation that the Bank of England may cut rates ahead of the US Federal Reserve. Investors will be monitoring the Bank of England's Bailey and Pill speeches on Thursday. If Bank of England policymakers continue to take a dovish stance, the Pound Sterling (BoE) could face further rate cuts.
Trading recommendation: Trade with buy orders when the price reaches 1.2570. Sell at the price level of 1.2470.
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