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The US dollar has been a standout loser in the FX space today. A Democrat-controlled Congress is widely seen as being at least mildly negative for the dollar, partly because of the potential implications for the AI investment story and partly because of the risk of another prolonged government funding standoff, potentially from next summer. This has allowed the likes of the GBP/USD to rally alongside gold and silver.
Over recent trading sessions, the British pound has begun to show a notable recovery. This can be observed in the performance of GBP/USD, which has gained more than 1.3% over the last four sessions, reflecting a consistent improvement in sterling's strength against the U.S. dollar.
GBP/AUD is forming a potential bullish continuation pattern, with RBA minutes, Australian unemployment and Bank of England commentary among the catalysts that could spark a breakout.
GBP/USD is locked within a tight technical range, with the Fed and BoE decisions poised to provide the catalyst for the next major move.
The pound sterling has started to show relevant strength against the U.S. dollar. At the moment, GBP/USD has gained slightly more than 1.3% in the short term, reflecting an important buying bias.
GBP/USD has dropped into pivotal support on the heels of the Fed & BOE rate decisions. Battle lines drawn on the Sterling charts.
The focus will be on the Fed tonight and it will be interesting to see their response to the collapse in oil prices on the back of the US-Iran deal. The drop in oil has certainly added a dovish argument ahead of new Chair Kevin Warsh’s first rate decision. Should he go against market's hawkish expectations, this could weigh on the dollar.
Sterling crosses are suddenly getting interesting again. With UK political fears temporarily fading and markets pricing at least two more BoE hikes this year, traders are now looking to UK data and inflation risks for direction.
Sterling crosses are suddenly getting interesting again. With UK political fears temporarily fading and markets pricing at least two more BoE hikes this year, traders are now looking to UK data and inflation risks for direction.
Markets are already hawkishly positioned on both the ECB and BoE, but with energy driving inflation expectations and broader sentiment, policy signals may struggle to generate anything more than short-lived moves
As the trading week progresses, GBPUSD has shown a decline of around 0.4%, with weakness in the pound and strength in the U.S. dollar.
GBP/USD pushes through resistance as multiple macro forces suddenly align. The signal looks clean, even if the backdrop remains anything but.
Softer UK CPI has revived expectations of a BOE rate cut, supporting optimism across risk assets. However, a potential BOE rate cut against a Fed rate hold could add further pressure on the pound versus the US dollar.
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