Pound sterling is consolidating below 1.3000 against the US dollar ahead of a data-heavy week in the US and the UK’s autumn forecast statement.
On Tuesday, the British pound (GBP) performed poorly in comparison to its major peers. The British pound trades cautiously ahead of the United Kingdom’s (UK) Autumn Forecast Statement, which will be release on Wednesday. This will be the Labor government’s first budget announcement in more than 15 years.
UK Chancellor Rachel Reeves poised to announce significant financing for the health service sector.
UK Chancellor of the Exchequer, Rachel Reeves, likely to raise taxes and increase public spending Prime Minister Keir Starmer mentioned this in a speech in Birmingham on Monday, according to BBC News. The administration would make “tough decisions,” including raising taxes, to “prevent austerity and rebuild public services,” according to Starmer.
Meanwhile, Rachel Reeves spoke about the importance of investing extensively in the National Health Service (NHS) to improve medical facilities, according to Reuters. “I am putting an end to the neglect and underinvestment (the NHS) has seen for over a decade now” , Reeves commented.
Investors are looking forward to the US JOLTS Job Openings data, which will provide new insights into labor demand.
Market players will pay close attention to the total spending intentions since they will impact the Bank of England’s (BoE) interest rate path. According to a Reuters poll, the BoE is projected to reduce interest rates by 25 basis points (bps) to 4.75% at its monetary policy meeting on November 7. This will be the BoE’s second interest rate drop of the year. At its most recent policy meeting in September, the central bank held its key borrowing rates constant at 5%.
Daily Market movers: Pound Sterling follows the US Dollar’s sideways performance.
In Tuesday’s London session, the pound sterling trades in a tight range below the psychological barrier level of 1.3000 against the US dollar. The GBP/USD pair is consolidating as investors anticipate a spate of United States (US) economic data, which will provide clues about the direction of the Federal Reserve’s (Fed) monetary policy by year-end.
Moreover This week, investors will primarily focus on the first estimate of Q3 GDP, the Personal Consumption Expenditure. The Price Index (PCE), Nonfarm Payrolls (NFP), and ISM Manufacturing Purchasing Managers’ Index (PMI) data are used to assess the present state of economic growth and inflation.
Fed officials have revealed that they are more concerned about downside risks to economic growth.
Meanwhile, recent comments from a number of Fed officials have revealed that they are more concerned about downside risks to economic growth, despite their solid belief that inflation will continue on pace to meet the bank’s target of 2%.
Moreover if the figures released later this week reveal evidence of robust economic growth and strong labor demand, betting on the Fed cutting interest rates considerably will fall. Fed rate drop bets would intensify if data showed slower growth and a weak labor market.
Moreover The CME FedWatch program provides 30-day Federal Fund Futures pricing data. The central bank projected to decrease interest rates by 25 basis points (bps) at both its policy meetings in November and December.
Furthermore During Tuesday’s New York session, investors will focus on the September US JOLTS Job Openings data, which will be release at 14:00 GMT. Economists predict US firms to publish 7.99 million job openings, a little decrease from 8.04 million in August.
