Pound Strengthens, Markets Await UK Data and US Interest Rates
The British pound (GBP) continued to strengthen against the US dollar (USD) at the start of the week, recording a fifth consecutive day of gains and approaching the 1.3450 level. This increase was driven by a weakening US dollar triggered by growing expectations of an imminent interest rate cut by the Federal Reserve (The Fed).
Currently, the US Dollar Index (DXY) is down 0.17% to around 98.00, reflecting waning interest in the greenback. Based on CME FedWatch data, the market is pricing in an 88% chance that the Fed will cut interest rates by 25 basis points at its September meeting.
Fed Governor Michelle Bowman stated that weak labor data, such as the July Nonfarm Payrolls report, supports the possibility of up to three interest rate cuts this year. Market participants are now turning their attention to the release of US inflation and UK economic growth data this week, which are expected to provide new direction for GBP/USD movements. (ayu)
Source: Newsmaker.id