GBP/USD Pair Trades in Consolidation as Critical Triggers Remain Absent
The [[GBP/USD]] pair is experiencing a lack of decisive movement as it oscillates below the key psychological resistance level of 1.2500 during the Tokyo session.
The GBP/USD pair is experiencing a lack of decisive movement as it oscillates below the key psychological resistance level of 1.2500 during the Tokyo session. The absence of significant catalysts is hindering any clear direction for the Cable. The USD Index is attempting to defend its downside around 1.2480, although the downside bias appears to be favored as the White House has agreed to raise the US borrowing cap in exchange for President’s spending initiatives.
In Asia, S&P500 futures show minor losses following a bullish Wednesday. Market sentiment is positive as concerns of a catastrophic US default have significantly diminished. The US Dollar Index (DXY) is trading within a narrow range around 102.81. Further progress towards the approval of raising the US debt ceiling would likely exert additional downward pressure on the USD Index, as an influx of US Dollars into the economy would reduce its appeal.
Furthermore, growing expectations of a pause in the Federal Reserve’s interest rate hikes are weighing on the USD Index. However, a recent Reuters poll indicates that the current interest rate of 5.00-5.25% is expected to remain unchanged by the end of 2023.
On the other hand, Bank of England (BoE) policymakers are still under pressure to address the persistent inflationary pressures in the United Kingdom. BoE Governor Andre Bailey stated on Wednesday that the easing of tightness in the UK labor market is happening at a slower pace than anticipated in February. This may help alleviate some of the heat from the current double-digit inflation in the UK.
However, UK Finance Minister Jeremy Hunt’s commitment to reducing higher taxes as a means to alleviate pressure on households from rising inflation could potentially stimulate retail demand.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals