GBP-USD: Traders Focused on BoE and U.S. Economic Developments
GBP-USD traders are closely following the developments at the Bank of England (BoE) and the volatile U.S. economic landscape. The potential factors that could impact the sterling against the dollar are being analyzed.
At the BoE, attention is on Clare Lombardelli, the upcoming deputy governor for monetary policy who is expected to take office on July 1, 2024. Prior to officially assuming her role, Lombardelli is appearing before lawmakers in parliament’s Treasury Committee. Having served as the OECD’s Chief Economist, Lombardelli brings a new perspective to the position.
In the UK, the GBP-USD reacted with caution to the latest labor market data, which displayed a mix of weakening job numbers but sustained high wage growth. This situation could influence the BoE’s decisions and potentially delay any aggressive rate cuts until August, despite an increase in unemployment and consecutive negative payroll revisions.
Meanwhile, in the U.S., the dollar is gaining strength from rising Treasury yields, reaching a five-month high of 4.60%. This increase is attributed to concerns about inflation and geopolitical tensions. Treasury Secretary Janet Yellen has acknowledged the decrease in inflation but emphasizes the need for additional measures to stabilize the economy.
The Federal Reserve has postponed its plans for rate cuts due to persistent inflation, contributing to the dollar’s resilience against GBP pressures. Additionally, the U.S. industrial sector has demonstrated strength with a 0.4% increase in production and a rise in capacity utilization, indicating that the economy is holding steady.
A technical analysis reveals a bleak outlook for the GBP-USD pair. The previous week marked the worst performance in nearly a year, and the pair is on course for its fourth consecutive month of decline. Unless there is a significant negative development for the USD, the weakness of the GBP-USD pair is likely to persist.
Ensure your investments in cryptocurrency are secure by tracking coin prices here.
