The pound recouped Thursday's losses | 23 Agosto 2024

23 Agosto 2024, GBP/USD

The pound recouped Thursday's losses

Events to watch out for today:

17:00 GMT+3. USD - Chairman of the Federal Reserve Board of Governors Jerome Powell will deliver a speech

22:00 GMT+3. GBP - Governor of the Bank of England Andrew Bailey will deliver a speech

GBPUSD:

The GBP/USD pair traded in positive territory for the seventh consecutive day near 1.3105 in the early European session on Friday. Investor confidence that the US Federal Reserve (Fed) will begin easing monetary policy at its upcoming September meeting continues to undermine the US Dollar as a whole.

Speeches from Bank of England (BoE) Governor Andrew Bailey and Fed Chairman Jerome Powell at a symposium in Jackson Hole on Friday will be in the spotlight and may provide a clearer picture of the interest rate trajectory. Minutes from the 30-31 July FOMC meeting showed that most Fed policymakers supported a rate cut next month amid progress in bringing inflation down to target. On Thursday, Boston Fed President Susan Collins said it would soon be appropriate to start cutting rates as inflation data is consistent with greater confidence that inflation will return to 2 per cent.

On the other hand, investors slightly pushed back their expectations for a Bank of England (BoE) interest rate cut in September following favourable purchasing managers' index (PMI) reports. This in turn further strengthened the Pound Sterling (GBP) against the US Dollar. Data released by the Chartered Institute of Purchasing and Supply and S&P Global on Thursday showed that the preliminary UK PMI exceeded expectations, jumping to 53.4 in August from 52.8 in July.

Meanwhile, the manufacturing PMI rose to 52.5 in August from 52.1 previously, better than the 52.1 expected. The services business activity index rose to 53.3 in the same month from 52.5 in July, beating the consensus forecast of 52.8. After the PMI data released on Thursday, the probability of a Bank of England rate cut in September is less than 30%.

Trading recommendation: Trade predominantly with Buy orders from the current price level

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David Johnson
Analyst of «FreshForex» company
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