Start
trading

Main >
Analytics
>
Fresh forecast
>
Forex Fundamental Analysis
>
Expectations of a Fed rate cut continue to undermine the US dollar

Expectations of a Fed rate cut continue to undermine the US dollar | 02 September 2024

02 September 2024, GBP/USD

Expectations of a Fed rate cut continue to undermine the US dollar

GBPUSD:

The GBP/USD pair demonstrated a period of consolidation around 1.3135, marking the end of a three-day losing streak in the early Asian session on Monday. In the absence of significant economic data releases from the UK this week, the dollar price dynamics of the GBP/USD will be a key factor. The US Non-Farm Payrolls (NFP) data for August, due for release on Friday, will be a key focus for many.

The prospect of a reduction in interest rates by the US Federal Reserve (Fed) continues to exert a downward pressure on the dollar. In a statement released last week, Fed Chairman Jerome Powell indicated that a reduction in interest rates was likely, citing challenges in the labour market. CME's FedWatch tool indicates that there is now a 70% probability of a 25-basis point (bps) reduction in the Federal Reserve's benchmark interest rate in September, with the likelihood of a 50-bps cut standing at 30%.

The release of key US jobs data on Friday will provide insight into the potential for the US dollar (USD) to sustain its recovery. Analysts anticipate that the US economy will have added 163,000 jobs in August, with the unemployment rate projected to have declined to 4.2%. Analysts anticipate that average hourly earnings will have increased by 0.3% in July compared to the previous month. Should the results be weaker than anticipated, there is a risk of heightened concerns about a potential slowdown in the US economy, which could lead to a decline in the value of the dollar. Conversely, investors are becoming increasingly confident that the Bank of England's (BoE) policy easing cycle will be gradual for the remainder of the year, which could provide a boost to the value of the pound sterling (GBP). According to a Reuters poll, economists anticipate that the Bank of England will implement another 25 basis point (bps) rate cut this year.

Trading recommendation: Trading predominantly Buy orders from the current price level.

FreshForex offers a wonderful 300% bonus on every deposit of $100 or more, giving you the opportunity to increase your trading volumes!

David Johnson
Analyst of «FreshForex» company
Agree with the review?
Traders' opinion:
Close
Log in

Show password

Hide password

 Forgot password?
Your browser does not support cookie. If cookie is disabled in your Internet browser, you may have problems with accessing Client Area. How to enable cookie .

Our best awards:

FreshForex is a brand that provides access to online trading for clients from more than 158 countries all over the world. The Company's partners are the licensed European liquidity providers, banks, payment aggregators and systems with which the company has been cooperating for more than 19 years.
Clients must be at least 18 years old to use the services of the Company.
The company's services and information on the site are not intended for citizens and residents of some countries, such as Belgium, China, North Korea, France, Hong Kong, Russian Federation, Spain, Great Britain, USA, and also countries identified by the FATF as high-risk countries or countries with serious AML/CFT deficiencies; countries or regions that are under international sanctions. A complete list is available on the "Countries where the company's services are not provided" page. The Company does not have representative offices in the Russian Federation and does not register clients from the Russian Federation.
Risk Warning: Trading financial instruments with leverage carries high risks and can result in both profits and losses. Potential losses are limited by the deposit amount. Before deciding to trade, the client should assess their risk tolerance, experience, and knowledge level.

Freshforex.com uses cookies for better website operation, traffic flow analysis, and personalization. By using this website you agree to our Cookie Policy.
User Data privacy is protected in accordance with GDPR. The SSL certificate installed on the website transfers the information over a secure protocol.
The site contains links to websites of third parties. The Company does not check or control the third-party resources that are in any way related to the FreshForex site, so the Company is not responsible for any third-party information or materials posted.
By creating a link to a third party website, the Company does not endorse or recommend any products or services offered by the third party.
The website content is intended for informational purposes only. It should not be regarded as an offer or solicitation to any person in any jurisdiction in which such an offer or solicitation is not authorized. It also should not be considered as an offer/solicitation to any person to whom it would be unlawful to make such an offer or solicitation, nor regarded as a recommendation to buy, sell or otherwise deal with any particular currency or any other trading asset investment. If you are not sure about your local trading regulations, please, leave this website immediately.
© 2004—2024 FreshForex – Forex broker
Reproduction of the contents is allowed only with active hyperlink to original source.
Riston Capital Ltd (20623 BC 2012) with registered address at Suite 305, Griffith Corporate Centre, Beachmont, P.O. Box 1510, Kingstown, Saint Vincent and the Grenadines.