GBP/USD extends its losing streak for the third successive day

GBP/USD falls to near 1.3050 due to less likelihood of an aggressive Fed rate cut

GBP/USD extends its losing streak for the third successive day, trading around 1.3060 during the Asian session on Tuesday. The downside of the pair could be attributed to the improved US Dollar (USD), which received support as recent US labor data raised uncertainty over the likelihood of an aggressive interest rate cut by the Federal Reserve (Fed) at its September meeting.

According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has slightly decreased to 29.0%, down from 30.0% a week ago. Read more…

USD: Shorts, paring back – Rabobank

USD net long positions have increased for the second week in a row. EUR net long positions have increased for the third consecutive week. GBP net long positions have increased for the third consecutive week, JPY net long positions have increased for the third consecutive week, Rabobank FX analysts note.

USD net long positions have increased for the second week in a row, driven by a decrease in short positions. Stronger-than-expected second estimates for US Q2 personal consumption (2.9% vs est. 2.2%) and GDP (2.0% vs est. 2.8%) on August 29th drove a 4.75bp increase in the 10yr. Traders are pricing in a 32bp cut at the Fed September meeting at the time of writing. Read more…

GBP/USD Price Forecast: Drops below 1.3100 as Fed large rate cut odds wane

The GBP/USD begins the North American session down by over 0.30% on Monday as traders trim the chances of a 50-basis point Fed interest rate cut in ten days. At the time of writing, the pair trades at 1.3075 after reaching a high of 1.3143.

The GBP/USD has fallen below the 1.3100 mark, though the uptrend remains intact unless sellers grab the pair below the July 17 high of 1.3044, which could open the door for a deeper pullback. Read more…