GBP/USD Steady Ahead of Bank of England Interest Rate Decision
The GBP/USD currency pair moved flat at the start of this week, after experiencing volatility due to a sharp revision to US employment data. The revision raised expectations for an interest rate cut by the Federal Reserve (The Fed), but also fueled fears of a deeper recession in the US.
With the market now almost certain that the Fed will cut interest rates on September 17, attention turns to the Bank of England (BoE), which will announce its interest rate decision this Thursday. A majority of the BoE's Monetary Policy Committee (MPC) is expected to vote for a 25 basis point rate cut by a 7-3 vote.
Meanwhile, the ISM Services PMI data for July showed an unexpected decline to 50.1, lower than the forecast of 51.5. Although some components, such as business activity and prices, showed improvement, the employment index fell into contractionary territory due to seasonal and weather factors.
Export and import activity also recorded a sharp decline, indicating that tariff pressures are beginning to have a tangible impact on US economic data. This combination of data has investors tending to be cautious, awaiting the direction of interest rates from the two major central banks before making any major market decisions. (ayu)
Source: Newsmaker.id
