GBPUSD pair oscillates in a narrow trading area between 1.2875 and 1.2905.
As the European trading day begins, the GBPUSD pair oscillates in a narrow trading area between 1.2875 and 1.2905. The key pair fails to gain ground as traders opt to stay put. Ahead of the Federal Open Market Committee’s (FOMC) meeting later in the day. The GBPUSD pair is now trading at 1.2901, down 0.01% on the day.
Economic activity in the United Kingdom was lower than expected, according to figures released earlier this week. PMI Manufacturing July’s reading dropped to 45.0 from 46.5 in June, which was lower than projected at 46.1. This was the manufacturing sector’s 12th consecutive decrease. Meanwhile, the preliminary Services PMI fell to 51.5 from 53.0 in the previous month and 53.7 projected.
Economists predict that the Bank of England (BoE) will raise interest rates to 5.25% at its next meeting.
The Bank of England (BoE) suddenly boosted its Bank Rate to 5.00% in June. Forcing markets to quickly price in a terminal rate of 6.50%. The Bank of England’s extra rate rise exacerbates worries about the Bank’s most aggressive rate hikes. In three decades and their impact on the UK economy, putting pressure on the Pound Sterling.
However, according to the most recent Reuters poll, 42 of 62 analysts believe the Bank Rate will be hiked by 25 basis points. to 5.25% at the forthcoming BoE meeting on August 3, while only 20 forecast a half-point increase.
Investors will be paying close attention to the Federal Open Market Committee (FOMC) meeting and press conference.
The Federal Reserve (Fed) is expected to announce its monetary decision later in the North American session. The Federal Reserve is largely expected to raise interest rates by 25 basis points to 5.25-5.50%. Market players will also be watching Fed Chairman Jerome Powell’s news conference closely, as it may provide some hints about the future course of monetary policy. A more dovish Fed approach might limit the Greenback’s upside and act as a tailwind for the GBPUSD pair.
In the lack of top-tier economic data from the UK, the USD’s value is expected to remain unchanged. to impact the pair’s movement. Market players will be watching the FOMC meeting and the press conference by Fed Chairman Jerome Powell. Aside from that, traders will look to the US Advance GDP QoQ and the core Personal Consumption Expenditure (PCE) Price Index MoM later this week for direction. These statistics might have a big influence on the US Dollar’s dynamic and provide a clear direction for the GBPUSD pair.
