14 May 2024, GBP/USD
Event to watch out for today:
09:00 GMT+3. GBP - Claimant Count Change
15:30 GMT+3. USD - Core Producer Price Index
17:00 GMT+3. USD - Federal Reserve Chairman Jerome Powell Speaks
GBPUSD:
The Pound-Dollar pair is consolidating near 1.2560 on Tuesday in the early Asian session. The weakening US Dollar (USD) amid a general improvement in appetite for risk assets is providing some support to the major pair. Investors will be keeping a close eye on the UK employment market, Bank of England Governor Pill's speech and US Producer Price Index (PPI) data due out later on Tuesday.
Several Federal Reserve (Fed) officials emphasized the need to keep rates higher for longer as inflation remains elevated. Fed Vice Chairman Philip Jefferson on Monday became the latest central bank official to call for interest rates to be held at current levels until inflation shows more signs of easing. Jefferson said he will continue to look for more evidence that inflation will return to the 2% target.
Financial markets have priced the probability of a June rate cut at nearly 5%, down from 10%, and the probability of a September rate cut has fallen to 75% from nearly 90% early last week. The cautious approach of Fed officials is likely to strengthen the US Dollar in the near term and limit the pair's upside.
Trading Recommendation: Watch the level of 1.2550, if the pair consolidates below, take Sell positions.
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