22 March 2024, GBP/USD
Event to watch out for today:
15:00 EET. USD - Fed Board of Governors Chairman Jerome Powell to deliver a speech
GBPUSD:
GBP/USD is holding just below the 1.2650 mark on Friday. The major pair's decline is supported by the strengthening of the US dollar (USD) and the Bank of England's (BoE) softness. Investors are awaiting fresh impetus from the UK retail sales data, which is expected to fall 0.3% in February.
The Bank of England kept the interest rate unchanged at 5.25% at its March meeting on Thursday, as expected. Bank of England Governor Andrew Bailey said the economy is not at the point where the Monetary Policy Committee (MPC) can cut interest rates, but the economy is on the right track. Markets expect the UK central bank to need more evidence of moderate wage growth before it can start cutting rates. Nevertheless, investors are keeping bets on a Bank of England rate cut this year, and the mood for an easing policy from the Bank of England Governor is weighing on the Pound Sterling (GBP) and acting as a headwind for GBP/USD.
The Fed left the rate unchanged at 5.25-5.50% at its March meeting on Wednesday, with the FOMC's average forecast keeping the possibility of three cuts in 2024. Markets rate the probability that the Fed will cut rates in June at about 80%, according to CME FedWatch Tool data.
Fed Chair Jerome Powell and Michael Barr are scheduled to speak today. Traders will focus on the data and look for trading opportunities in the GBP/USD pair.
Trading recommendation: Trade predominantly with sell orders from the current price level
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