08 May 2024, GBP/USD
GBPUSD:
The Pound-Dollar pair is trading on a softer note near 1.2500 on Wednesday during the early Asian session. The US Dollar Index (DXY) is recovering slightly to 105.40, leading the major pair lower. Later on Wednesday, Federal Reserve (Fed) members Philip Jefferson, Susan Collins and Lisa Cook are scheduled to speak. The Bank of England's (BoE) interest rate decision will take center stage on Thursday.
Expectations of Fed rate easing have eased slightly and boosted the US Dollar against its peers. The probability of a June rate cut remains at around 10%, while September odds have fallen to 85%, according to CME's FedWatch tool. On Friday, traders will be keeping an eye on the University of Michigan's preliminary consumer sentiment index, which is estimated to have fallen to 76.0 in May from 77.2 in April.
On the other hand, the Pound Sterling (GBP) is declining as investors focus on the upcoming monetary policy meeting. The UK central bank is expected to keep interest rates unchanged at 5.25%. However, there is speculation that the Bank of England will cut interest rates ahead of the Fed, which is weighing on the Pound. Last month, Bank of England Governor Andrew Bailey said he was comfortable with market expectations of two or three rate cuts this year.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
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