Fundamental Market Analysis for April 15, 2024 GBPUSD
An event to look out for today:
15:30 GMT+3. USD - Change in retail trade volume
GBPUSD:
The GBPUSD pair is strengthening on the back of a stable US Dollar (USD), trading near 1.2460 during Asian hours on Monday. The US Dollar (USD) remains below its highest level since November 2023, potentially limiting the GBP/USD pair's upward momentum.
The US Dollar Index (DXY) is hovering around the 106.00 mark, while the 2-year and 10-year US Treasury bond yields stand at 4.91% and 4.55%, respectively, at the time of publication. Higher U.S. bond yields could provide support for the U.S. dollar (USD).
The Federal Reserve (Fed) looks set to revise its monetary easing plans due to continued US inflation and strong macroeconomic data. According to CME FedWatch Tool data, the probability of interest rates remaining unchanged at the June meeting rose markedly to 63.5% from 46.8% the previous week.
On Friday, the Pound Sterling (GBP) fell against the US Dollar to its lowest level since November, hitting 1.2426. Heightened tensions in the Middle East likely prompted traders to seek refuge in the US Dollar. However, market forecasts for an interest rate cut by the Bank of England (BoE) have been adjusted, with the rate now expected to fall to 4.75% by the end of 2024, down from the current rate of 5.25%. This differs from the previous expectation of a rate cut to 4.5% by December.
Bank of England policymaker Megan Green emphasized that a rate cut in the United Kingdom (UK) should still be seen as a distant prospect, pointing to the greater risk of persistent inflation in the UK compared to the US.
Trading recommendation: Trade mainly with buy orders at the price level of 1.2500. Consider sell orders at the price level of 1.2455.
15:30 GMT+3. USD - Change in retail trade volume
GBPUSD:
The GBPUSD pair is strengthening on the back of a stable US Dollar (USD), trading near 1.2460 during Asian hours on Monday. The US Dollar (USD) remains below its highest level since November 2023, potentially limiting the GBP/USD pair's upward momentum.
The US Dollar Index (DXY) is hovering around the 106.00 mark, while the 2-year and 10-year US Treasury bond yields stand at 4.91% and 4.55%, respectively, at the time of publication. Higher U.S. bond yields could provide support for the U.S. dollar (USD).
The Federal Reserve (Fed) looks set to revise its monetary easing plans due to continued US inflation and strong macroeconomic data. According to CME FedWatch Tool data, the probability of interest rates remaining unchanged at the June meeting rose markedly to 63.5% from 46.8% the previous week.
On Friday, the Pound Sterling (GBP) fell against the US Dollar to its lowest level since November, hitting 1.2426. Heightened tensions in the Middle East likely prompted traders to seek refuge in the US Dollar. However, market forecasts for an interest rate cut by the Bank of England (BoE) have been adjusted, with the rate now expected to fall to 4.75% by the end of 2024, down from the current rate of 5.25%. This differs from the previous expectation of a rate cut to 4.5% by December.
Bank of England policymaker Megan Green emphasized that a rate cut in the United Kingdom (UK) should still be seen as a distant prospect, pointing to the greater risk of persistent inflation in the UK compared to the US.
Trading recommendation: Trade mainly with buy orders at the price level of 1.2500. Consider sell orders at the price level of 1.2455.
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