Pound Slides as US Dollar Gains on Fed Outlook
Login

Pound Slides as US Dollar Gains on Fed Outlook

Estimated Reading Time: 3 minutes
Article Rating:
Based on 1 vote
Login to rate this article.

Azeez Mustapha

Updated:


The British Pound fell for the second consecutive week against the US dollar as the greenback benefited from a hawkish Federal Reserve and upbeat US data. The GBP/USD pair traded below the 1.26 level for the first time since mid-June as investors priced in a sooner-than-expected rate hike by the Fed.

GBP/USD 4-hour chart from TradingView
GBP/USD 4-hour chart from TradingView

US Data and Fed Minutes in Focus for Cable Traders

The upcoming week will offer plenty of catalysts for the GBP/USD pair, with the US Nonfarm Payrolls (NFP) report being the main event. The NFP data, due on Friday, will provide clues on the strength of the US labor market and its implications for the Fed’s monetary policy.

The market consensus is for a solid increase of 200,000 jobs in June, following an impressive 339,000 gain in May. A higher-than-expected number could boost the US dollar further, while a lower-than-expected figure could trigger a corrective bounce in the pound.


source: tradingeconomics.com

Other key US data releases include the ISM Manufacturing and Services PMIs, the ADP Employment Change, and factory orders. These indicators will also reflect the state of the US economy and its recovery from the pandemic.

Additionally, the minutes of the Fed’s June meeting, scheduled for Wednesday, will be scrutinized for more details on the central bank’s hawkish shift. The Fed surprised markets last month by signaling two rate hikes by 2023 and opening discussions on tapering its bond-buying program.

UK Data Unlikely to Move the Needle for the Pound

On the other hand, the UK economic calendar will be relatively light, with only the final Services PMI for June on tap. The PMI is expected to confirm a robust expansion of the service sector, but it is unlikely to have a significant impact on the Pound.

UK service PMI chart
Source: Commons Library

The GBP/USD pair will also pay attention to any developments on the Brexit front as well as speeches from Bank of England (BoE) officials. Any hints of policy divergence between the BoE and the Fed could affect the exchange rate.

 

You can purchase Lucky Block here. Buy LBLOCK

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Learn to Trade

Never Miss A Trade Again

step 1
Signal Notification

Real-time signal notifications whenever a signal is opened, closes or Updated

step 2
Get Alerts

Immediate alerts to your email and mobile phone.

step 3
Entry Price Levels

Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.

Share with other traders!

telegram
Telegram
forex
Forex
crypto
Crypto
algo
Algo
news
News