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.

Arslan Butt•Tuesday, August 29, 2023•1 min read

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.

A decline in US Treasury bond yields nudged the USD from its recent peak, acting as a catalyst for the GBP/USD pair’s upward movement. The prevailing positive market sentiment, fueled by China’s recent initiatives to rejuvenate its stock markets, also weighed on the USD’s safe-haven appeal. Conversely, the GBP derived strength from the hawkish sentiments of BoE Deputy Governor Ben Broadbent, who indicated that policy rates might remain restrictive for a foreseeable period.

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.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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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.

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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.

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HFM

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