19 March 2024, GBP/USD
GBPUSD:
The GBP/USD pair remains under some selling pressure at the start of the Asian session on Tuesday. A rising US dollar and rising US yields provide some support for the major pair. Markets are becoming cautious ahead of central bank meetings, including interest rate decisions by the Federal Reserve (Fed) and the Bank of England (BoE).
The Fed is expected to leave the interest rate unchanged for the fifth consecutive time at its March meeting on Wednesday and signaled that they still need further evidence that inflation will steadily return to the 2% target. Fed Chairman Jerome Powell said earlier this month that the US central bank could cut the benchmark interest rate later this year, even though further progress in bringing inflation down to target is "not assured".
UK inflation is falling, but the Bank of England remains cautious in its actions until the consumer price index returns to its 2% target. The Bank of England is likely to leave interest rates unchanged at 5.25% on Thursday. Investors expect the U.K. central bank to start cutting rates in August and then cut rates once or twice more before the end of the year.
Traders will also be keeping a close eye on the press conference, which is unlikely to show much change. However, the possibility remains that policymakers may reduce the number of rate cuts this year to two from three.
Trade recommendation: Sell at 1.2695
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