29 May 2024, GBP/USD
Event to watch out for today:
21:00 GMT+3. USD - Publication of the Fed's Beige Book economic survey by region
GBPUSD:
The Pound-Dollar pair is trading with small losses near 1.2760 during the Asian session on Wednesday. A moderate recovery in the US Dollar (USD) and US yields amid lower expectations of a rate cut by the US Federal Reserve (Fed) in September is weighing on the major pair. Later on Wednesday, the Fed's Beige Book will be released and Fed Chief John Williams will deliver a speech.
Consumer confidence improved slightly in May, the Conference Board reported Tuesday. The gauge rose to 102.0 in May from 97.0 in April, beating an estimate of 95.9. However, U.S. consumers remain concerned about inflation, and many households believe interest rates will rise over the next year.
Meanwhile, US Federal Reserve officials made more hawkish comments, which generally helped to strengthen the dollar. Fed chief Michelle Bowman said Tuesday she would support either waiting for the pace of quantitative tightening to begin to slow or a more moderate process of rate cuts than was announced earlier this month. Minneapolis Fed President Neel Kashkari said the central bank should wait for significant progress on inflation before cutting interest rates, adding that he expects no more than two rate cuts in 2024.
On the other hand, the expectation that the Bank of England (BoE) will start cutting interest rates in June is dragging the Pound Sterling (GBP) down. The International Monetary Fund (IMF) raised its growth forecasts for the UK economy, but expected the Bank of England to cut rates two or three times. Amid a lack of important economic data releases from the UK, election speculation could boost GBP movement. Worries about political uncertainty may hurt the British pound and create a headwind for the GBP/USD pair.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
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