27 February 2024, GBP/USD
Event to watch out for today: 17:00 USD - Consumer Confidence Indicator GBPUSD:
GBP/USD held near the psychological barrier of 1.2700 in the early Asian session on Tuesday. The FOMC meeting minutes showed that the Fed reaffirmed its data-driven approach, leading to a softer outlook, which is weighing on the US Dollar (USD) and creating a tailwind for the pair. The Pound-Dollar pair was able to consolidate yesterday's gains after a localized correction, currently trading at 1.2685, gaining 0.02% for the day.
Testimony from Bank of England (BoE) Governor Andrew Bailey and other policymakers at the UK Treasury Committee last week sparked speculation of a delay in rate cuts, which boosted the Pound Sterling (GBP). However, he said he would not forecast how many cuts are planned over the course of the year. He also stated that the central bank has moved from a stance on how tight policy should be and how high rates should be, to how long the BoE should maintain this stance to achieve sustainable inflation. After the Bank of England decided to leave the interest rate unchanged at 5.25% earlier this month, markets were expecting four rate cuts later this year.
On the other hand, New York Federal Reserve (Fed) President John Williams said last week that the central bank is on track to cut interest rates later this year, despite stronger-than-expected inflation and labor market data in January. However, Fed Chairman Jerome Powell emphasized last week that a March rate cut is highly unlikely.
Trading recommendation: Watch the level of 1.2700, if it is broken take Buy positions
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