Pound sterling surges to near 1.3000 against the US dollar as the Fed appears prepared to begin lowering interest rates in September.

In Monday’s London session, the Pound Sterling (GBP) held gains just below the psychological resistance level of 1.3000 against the US Dollar (USD). The GBPUSD pair stays steady amid growing anticipation. That the Federal Reserve (Fed) would begin lowering interest rates at its September meeting.

Strong US PPI report fails to dampen Fed rate cut forecasts.

Investors’ confidence in the probability of the Fed lowering interest rates in September remains firm. Even despite (US) Producer Price Index (PPI) data for June, issued on Friday, rose faster than predicted. Both headline and core producer inflation were greater than predicted on a monthly and annual basis, owing to a considerable increase in the cost of services.

Market speculation on Fed rate cuts increase dramatically on Thursday. After the US Consumer Price Index (CPI) report for June showed. That the disinflation process had begun after being halted in the first quarter of this year. Inflationary pressures have eased on both the headline and core fronts. Because of evident fractures in the job market. The Fed’s chances of reducing its benchmark interest rates increased.

Meanwhile, the US Dollar Index (DXY), which tracks the value of the greenback. Against six main currencies, gains near 104.00. The USD Index finds support as investors flock to safe havens. Following an assassination attempt on former US President Donald Trump in Pennsylvania. The situation has raised the chances of Trump winning the US presidential election this year.

However, the US Dollar’s near-term appeal remains gloomy. As investors believe the Fed’s decision to decrease borrowing rates in September is a done deal. This week, investors will pay close attention to the US monthly retail sales data for June. Which will be released on Tuesday. Economists expect that Retail Sales stayed constant after a paltry 0.1% increase in May.

Daily Market movers: Pound Sterling shows strength with UK inflation and employment figures in focus.

The pound Sterling rose versus its major counterparts on Monday. The British pound gains as investors view the United Kingdom’s (UK) markets as a better place to invest. Unlike the European Union and the US economy. Which are dealing with political uncertainty, Keir Starmer’s Labour Party’s landslide victory has ensured stable fiscal policies and efficient ministry distribution.
Aside from that, growing uncertainty over the timing of Bank of England (BoE) rate cuts has been a major contributor to Sterling’s rise.

Investors are waiting for new BoE interest rate advice in the form of UK inflation and employment data.

Currently, financial markets expect the BoE to start cutting interest rates after the August meeting. On the contrary, BoE officials are hesitant to support rate reduction in August, concerned about high inflation in the service sector due to strong wage growth. The rate at which wages rise Growing is approximately double what is required to restore price stability.
The UK Office for National Statistics (ONS) will report inflation and employment figures on Wednesday and Thursday, respectively, reducing doubt about the timeline for the BoE rate cut. The core CPI, which excludes volatile food and energy costs, is estimated to have slowed to 3.4% from 3.5% in May. Annual Average Earnings Including Bonus for the three months ending in May are expected to fall to 5.7% from the previous report of 5.9%.