GBPUSD pair is struggling to capitalize on the overnight bullish rise in the face of minor USD growth.
The GBPUSD pair falls during Tuesday’s Asian session. Reversing a portion of the previous day’s goodish advance up of around 85 pips from sub-1.2100 levels. Spot prices are currently trading about 1.2155. Down slightly more than 0.10% on the day and well within a regular range held over the last week or so.
The downside appears to be cushioned ahead of the FOMC meeting on Wednesday and the BoE meeting on Thursday.
Traders appear hesitant to place aggressive directional bets. And prefer to wait for the market to move The FOMC policy decision on Wednesday. Followed by the Bank of England (BoE) meeting on Thursday, are the biggest central bank event risks this week. Meanwhile, expectations that the Fed will maintain its hawkish attitude support elevated US Treasury bond rates. And aid reinvigorate US Dollar (USD) demand, which is seen exerting some pressure on the GBPUSD pair.
The US economy’s resiliency, along with persistently rising inflation. Provides the Fed leeway to maintain interest rates higher for longer. In fact, markets are still pricing in one more rate hike before the end of the year. In contrast, the Bank of England is projected to keep its key interest rate unchanged at 0.5%.
5.25% for the second time in 15 years to help the struggling economy. This, in turn, favors bearish traders and suggests that the GBPUSD pair’s path of least resistance is to the downside.
Moving forward, there is no important market-moving economic data from the UK planned for publication. Leaving spot prices at the mercy of USD price dynamics. Later in the early North American session, traders will look to the US economic calendar, which includes the Chicago PMI and the Conference Board’s Consumer Confidence Index. Aside from that, US bond rates will fuel USD demand and contribute to the creation of short-term trading opportunities in the GBPUSD pair.
