07 August 2024, GBP/USD
Event to watch out for today:
17:30 GMT+3. USD - Crude Oil Inventories data from the Department of Energy
GBPUSD:
The GBP/USD pair is pulling back from its recent losses, trading near 1.2710 during Wednesday's Asian session. The gains can be attributed to a weaker US dollar (USD) after expectations of a more aggressive rate cut from September rose after weak US jobs data in July heightened fears of a looming US recession.
According to the CME FedWatch tool, the probability of the US Federal Reserve (Fed) cutting interest rates by 50 basis points (bps) in September stands at 67.5%, up from 13.2% a week earlier.
According to Reuters, Federal Reserve Bank of San Francisco President Mary Daly noted on Monday that "risks to Fed mandates are becoming more balanced and that there is an openness to the possibility of rate cuts at upcoming meetings." In addition, Chicago Fed President Austan Goolsbee said the central bank is prepared to act if economic or financial conditions deteriorate.
The British pound's upside potential may be limited by general risk aversion. Concerns over escalating Middle East conflicts intensified after Iran-backed Hezbollah fired dozens of rockets into Israel in response to the assassination of Hamas leader Ismail Haniyeh in an Israeli airstrike on Tehran.
Trading recommendation: We follow the level of 1.2700, on the rebound we gain Buy positions.
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