The Pound Sterling (GBP) has slightly rebounded from key support around 1.3300 against the US Dollar (USD) during Thursday’s London session, following a sharp correction on Wednesday. The GBP/USD pair finds support as investors speculate that the Federal Reserve’s (Fed) easing cycle may be more aggressive than the Bank of England‘s (BoE) approach for the remainder of the year.
According to the CME FedWatch Tool, the Fed is projected to reduce its key borrowing rates by a total of 75 basis points (bps) in its next two meetings, with market odds for a November cut rising from 39% to 61%. Investors are keenly awaiting remarks from Fed officials, including Chair Jerome Powell, in the North American session, particularly after his comments on being data-dependent following last week’s rate cut.
On the economic front, market participants are looking forward to the US Personal Consumption Expenditure (PCE) data for August, set for release on Friday. A slowdown in inflation may strengthen expectations for a 50 bps cut, while strong figures could diminish those hopes.
The Pound trades cautiously against major peers on Thursday due to a lack of significant UK economic data. The BoE is expected to implement one rate cut in its remaining policy meetings this year, though concerns over persistent inflation in the service sector linger. Annual service inflation rose to 5.6% in August, up from 5.2% in July.
Technically, the GBP/USD pair is trading around 1.3345, showing resilience above the 20-day Exponential Moving Average (EMA) at 1.3216. The 14-day Relative Strength Index (RSI) indicates active bullish momentum. Resistance is seen near the psychological level of 1.3500, while support is crucial at 1.3000.
Related Topics:
