31 July 2024, GBP/USD
An event to look out for today:
21:00 GMT+3. USD - FOMC decision on the key interest rate
GBPUSD:
GBP/USD remains on the defensive near 1.2840. Markets may turn cautious ahead of the Federal Reserve (Fed) interest rate decision on Wednesday and then the Bank of England (BoE) meeting on Thursday.
The Fed is expected to leave interest rates unchanged at its July monetary policy meeting on Wednesday. The U.S. central bank has kept the benchmark interest rate in a range of 5.25-5.50 percent since July 2023, marking the longest period of restrictive monetary policy in decades.
Market participants will be watching Fed Chairman Jerome Powell's remarks for further clues on the future path of rates. Markets expect the Fed to begin easing policy as early as September as inflation has moved closer to the Fed's 2% target.
Data released on Tuesday showed U.S. JOLTS job openings fell to 8.184 million in June from a revised May figure of 8.23 million, above market expectations of 8.03 million. Meanwhile, the U.S. consumer confidence index rose to 100.3 in July from a revised 97.8 in June. According to the Conference Board, the figure was above the market consensus forecast of 99.7.
As for the British Pound, investors continued to believe that the Bank of England may cut rates on Thursday, which led to a decline in the Pound Sterling (GBP) against the US Dollar. There is almost a 58% chance that the Bank of England will cut borrowing costs by 25 basis points (bps) to 5%, Reuters reports.
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