GBP/USD Sees Slight Uptick Amid Multiple Market Influences

The GBP/USD duo experienced an uplift for the consecutive second day on Tuesday, rebounding from its weakest point since June 13 in the vicinity of the 1.2550-1.2545 region last week. During the Asian trading hours, the pair floated around 1.2620-1.2625, marking an ascent of over 0.15% on the day, albeit still beneath the 100-day SMA support pivot.

However, the prospects of additional rate hikes by the Federal Reserve stand as a potential boost for US bond yields, thereby capping the USD’s decline. This sentiment was echoed by Fed Chair Jerome Powell, emphasizing the need to control the prevailing inflation through potential rate hikes. The US economy’s resilient performance only reinforces this stance. Last week’s surge in the 10-year US government bond yield also amplifies the USD’s bullish perspective.

Furthermore, the prevailing speculation that the BoE might hold off on rate hikes post the anticipated 25 bps increase in September might exert pressure on the GBP/USD trajectory. Given this backdrop, investors might opt for caution, awaiting substantial purchasing momentum to ascertain the pair’s future direction. Market participants now set their sights on the forthcoming US economic indicators, particularly the Conference Board’s Consumer Confidence Index and JOLTS Job Openings data, set to be released later today.