Pound Stuck at 1.31, Markets Uncertain Ahead of Holiday & Fed Decision
GBP/USD traded flat and hovered around the 1.3100 level at the start of the week, as trading momentum slowed. Market participants faced a very short week due to the Thanksgiving holiday in the US: US markets were closed on Thursday and only open for a half-day on Friday. In practice, there were only three effective days when both London and New York markets were active, so cable movement tended to be limited.
On the fundamental side, expectations that the Federal Reserve would cut interest rates for the third consecutive time in December remained quite strong. The FedWatch Tool showed the market pricing in almost an 80% chance of a 25 bps cut on December 10, and another cut was almost certain by the end of January. However, the lengthy US government shutdown delayed the release of October-November employment data until December 16, leaving the Fed short of crucial data ahead of its interest rate decision.
As a result, US producer inflation (PPI) data, due on Tuesday, is likely to receive more attention than usual. However, this indicator doesn't include imported goods, so it only provides a partial picture of the tariff war's direct impact on business costs. For the market, the combination of a short week, limited data, and uncertainty about the Fed's direction has kept GBP/USD temporarily "trapped" in the 1.31 area while awaiting new triggers. (asd)
Source: Newsmaker.id
