Pound sterling remains above 1.2500 despite the fact that the Fed’s interest rate guidance was slightly less hawkish than predicted.

The Pound Sterling (GBP) struggles to maintain gains above the critical barrier level of 1.2500. As market sentiment turns shaky in Thursday’s London session. The GBPUSD pair is down marginally from the previous close of 1.2526. The Cable is losing the impetus that was fueled by a weaker USD. Which was hammered on Wednesday after the The Federal Reserve’s (Fed) interest rate guidance was less hawkish than expected. With rates remaining steady for the sixth consecutive time.

Fed Chair Jerome Powell expressed confidence that interest rates will be reduced this year.

Fed Chair Jerome Powell’s comments in the press conference. Following the monetary policy meeting indicated. That he still sees the central bank pivoting to interest rate decreases this year. Despite his concerns over slowing progress in inflation falling to the 2% objective. When asked about the Fed’s stance on interest rate decreases, Jerome Powell indicated that while he expected inflation to fall this year, “my confidence in that is lower than it was.”

Regarding the inflation outlook, Fed Chair Jerome Powell stated that price increase “is still too high,” adding that “further progress in Its completion is not guaranteed, and the route forward is unknown.”

Aside from the Fed’s less hawkish view, the abrupt slowing of balance-sheet shrinking signaled that the central bank is still leaning toward quantitative easing.

Daily Market movers: Pound sterling battles to hold gains as the US Dollar looks to comeback.

The pound sterling is losing strength above the psychological resistance of 1.2500 against the US dollar (USD) amid uncertainty. As investors await the US Nonfarm Payrolls (NFP) data and the ISM Services PMI report for April. Which will be released on Friday.
Economists predict that US firms hired 243K job seekers in April, which is lower than the previous estimate of 303K. The Services PMI is expected to have risen to 52.0 from The prior reading was 51.4. The appeal of risk-perceived currencies is fading as labor market data weighs heavily on market expectations for Fed rate cuts at the September meeting.
The US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, attempted to recover losses and reached near 105.50. The US dollar was under pressure as Fed Chair Jerome Powell provided less hawkish than expected advice on interest rates. The Fed’s hint that it will continue to reverse quantitative tightening impacted severely on the US dollar and bond yields.

Bank of England is likely to keep interest rates unchanged at 5.25% for the sixth time in a row.

In the United Kingdom, investors’ attention has switched to the Bank of England’s interest rate decision. Which will be revealed on May 9. The BoE is anticipated to maintain interest For the sixth time in a row, interest rates remained constant at 5.25%. Investors will pay close attention to the inflation outlook. And hints about when the BoE will begin lowering interest rates.