GBPUSD loses momentum at 1.2200 as the USD rallies.
During the early European session on Tuesday. The GBPUSD pair remains under selling pressure and trades in negative territory for the fourth consecutive week. The major currency is presently trading in 1.2203, down 0.07% on the day.
The Bank of England (BoE) opted to keep the benchmark rate constant at a 15-year high of 5.25%. Bringing an end to a streak of 14 consecutive rate rises since December 2021. As a result, the British Pound (GBP) may suffer versus the US Dollar. The official from the Bank of England noted. That further meetings are conceivable, implying that the Bank of England might raise or stop interest rates if necessary.
Federal Reserve (Fed)’s aggressive statements boost the GBPUSD.
The Federal Reserve’s (Fed) hawkish approach, on the other hand. Strengthens the US Dollar and serves as a headwind for the GBPUSD pair.
Neel Kashkari, President of the Minneapolis Federal Reserve Bank, announced early Tuesday. That he is one of the Fed members who foresee one more rate rise this year. To calm things down, he believes that US interest rates will need to rise somewhat and remain there for a longer period of time. Previously, the Presidents of the Federal Reserve Banks of Boston and San Francisco, Susan Collins and Mary Daly. Although inflation is declining, additional rate hikes are expected. While Chicago Fed President Austan bee stated. That a gentle landing is feasible, inflation risks remain high. And the Fed should stay fully committed to achieving 2% inflation.
This week’s highlights will be the UK Gross Domestic Product (GDP) Q2 and the US Core Personal Consumption Expenditure (PCE) Price Index.
Meanwhile, the US Dollar Index (DXY), which measures the value of the US dollar. In relation to a basket of international currencies, is trading around its highest level since November. Furthermore, the 10-year yield has risen to 4.546%, a level not seen since October 2007.
Market players will keep an eye on US CB Consumer Confidence for September and New Home Sales. Which are both coming later on Tuesday. The focus will move to the UK GDP for the second quarter, as well as the US Core Personal Consumption. On Friday, the Price Index for Consumer Expenditure (PCE) was issued.
