The Pound Sterling (GBP) has been under pressure. As market players have been cautious. Ahead of Bank of England (BoE) Governor Andrew Bailey’s speech on Monday at 15:00 GMT. The bias for the GBPUSD pair has weakened as investors become concerned about the BoE’s plans to raise interest rates again.
The United Kingdom’s economic outlook is jeopardized since people are already burdened by increased interest payments. And additional policy tightening will exacerbate the situation. Make home activities more susceptible. In addition to Bailey’s speech. Investors will be watching Britain’s employment figures. Clarity on labor market circumstances would also give hints on interest rate policy.
The pound sterling is expected to fall ahead of Bailey’s address.
The pound has been under pressure as investors get wary ahead of Bank of England Governor Andrew Bailey’s speech.
Investors will be searching for clues regarding inflation and interest rate guidance. As well as techniques outside monetary tools that the central bank is considering.
Increased pay pressure will make Andrew Bailey uneasy. The Governor of the Bank of England is working hard to reduce inflation. This is a significant task for UK Prime Minister Rishi Sunak, who has vowed to cut pricing pressures in half by the end of the year.
Andrew Bailey asked industry regulators last week to cease overcharging customers for gasoline.
The US Dollar Index (DXY) has recovered as expectations for future interest rate rises from the Federal Reserve (Fed) have risen, bolstering negative market sentiment.
Nonfarm Payrolls (NFP) in the United States fell short of forecasts, while wage pressures remained resilient, causing Fed officials to be concerned about inflation guidance.
Fed Chair Jerome Powell is on pace to announce an interest rate rise, as rising average hourly earnings might make inflation exceedingly tenacious.
According to Chicago Fed President Austan Goolsbee, two more interest rate rises this year are likely.
Investors will continue to be cautious in the future. Their whole attention will be on the US Consumer Price Index data, which is slated for release on Wednesday at 12:30 GMT.
The economic picture for the United Kingdom is under peril as investors anticipate higher interest rate peaks.
The UK economy is being weighed down by rising inflation. As the housing sector declined at the fastest rate in more than 14 years in June due to increasing borrowing rates.
Britain’s inflation has stayed high as a result of to greater food prices and labor shortages.
Investors will gain insight into labor market conditions with the release of the United Kingdom Employment Report on Tuesday at 6:00 GMT.
Claimant Count Change is predicted to rise by 20.5K in June, after falling by 13.6K the previous month.
Technical Outlook
On Monday, the pound sterling reversed course after setting a new yearly high of 1.2850. On a daily basis, the Cable is reaching the upper half of the Rising Channel chart pattern.
Short-to-long-term daily Exponential Moving Averages (EMAs) are trending north, indicating the Pound Sterling’s strength. Momentum oscillators are in the positive area, suggesting a strong upward tilt.
If the Pound Sterling rises over the yearly high of 1.2850, the Cable will rise further. If the asset falls below the, the bullish bias may diminish. 1.2680 is a critical support level.
