STORY LINK Pound US Dollar Exchange Rate Undermined ahead of Federal Reserve Speeches
The Pound US Dollar exchange lost ground on Monday as markets awaited several speeches from the Federal Reserve.
At the time of writing, GBP/USD traded at approximately $1.3081, down roughly 0.3% from the start of Monday’s session.
The US Dollar (USD) saw little movement against most of its counterparts on Monday, with a lack of US economic data releases during the early European trading session leaving the currency directionless.
USD investors were awaiting a series of speeches from Federal Reserve officials scheduled for Monday evening, which kept exchange rates largely unchanged.
Given the uncertainty surrounding Federal Reserve interest rate cuts, investors were hoping for insights into future US monetary policy before making significant moves.
Following Friday’s stronger-than-expected non-farm payrolls report, expectations for another 50 basis-point rate cut have waned. However, if the upcoming speeches suggest a further 50 bps cut is on the table, USD exchange rates could tumble as a
result.
The Pound (GBP) held firm against most of its counterparts on Monday despite a lack of economic data releases.
However, some modest support for GBP exchange rates came from the day’s risk-averse market sentiment.
With its growing risk sensitivity, Sterling drew strength from the cautiously upbeat trading session, helping it stay afloat amid the absence of other influencing factors.
Looking forward, the main driver of the Pound US Dollar exchange rate on Tuesday is expected to be some mid-level economic data from the UK.
The latest retail sales monitor from the British Retail Consortium (BRC) is predicted to show a modest rise in the previous month’s figure. If the data aligns with expectations, it could offer some support to the Pound.
Shifting focus to the US Dollar, another day with sparse data releases may leave USD exchange rates susceptible to additional comments from Federal Reserve officials.
The ‘Greenback’ could weaken if these speeches suggest the possibility of further significant rate cuts.
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TAGS: Pound Dollar Forecasts
