GBP/USD marks mild losses in Monday’s session

GBP/USD stands flat, markets await key data releases and Federal Reserve minutes for direction

In Monday’s session, the GBP/USD traded with mild losses at the 1.2597 level. The market showed a limited market movement due to the absence of high-tier economic releases and the Presidents’ Day holiday, taking the US Traders out of the picture.

For the rest of the week, on Thursday, the preliminary February Manufacturing and Services PMI surveys for the UK and the US will be looked upon for fresh impetus. On Wednesday, the Federal Reserve (Fed) will release the minutes of the January policy meeting. As for now, markets are delaying the start of the easing cycle for both the Fed and Bank of England (BoE) due to both blocks not showing enough evidence of the inflationary pressures coming down. On the one hand, the Fed’s minutes might show markets explicitly how open are the bank’s officials to start cutting while the PMIs will give additional information on the health of both economies. Both reports might fuel volatility on the pair as they may affect the bets and timing of the start of the Fed’s and BoE’s cutting cycles. Read more…

Pound Sterling turns negative as risk appetite wanes in a holiday-truncated week

The Pound Sterling (GBP) faces a sell-off in Monday’s early New York session against the US Dollar as the market mood turns downbeat. The GBP/USD pair retreats despite the  Bank of England (BoE) is expected to hold interest rates at their current level for a longer period. Persistent price pressures in the United Kingdom economy due to stubborn service inflation, steady labor demand, and robust household spending would allow BoE policymakers to maintain a hawkish narrative for a longer period. 

Last week, the surprisingly upbeat UK Retail Sales data indicated that the impact of higher interest rates by the BoE on consumer spending is fading. This indicates that the UK economy would come out of the technical recession sooner than previously thought. The UK economy entered a technical recession in the second half of 2023 as the BoE maintained interest rates higher to tame high inflation, which impacted consumer spending and business operations significantly. Read more…