GBP/USD exchange rate muted ahead of US data releases
The pound US dollar (GBP/USD) exchange rate is trading in a narrow range this morning as investors await a duo of impactful data releases from the US.
At the time of writing the GBP/USD exchange rate is trading at around $1.2886, virtually unchanged from this morning’s opening rate.
US dollar (USD) to dip following domestic data?
The US dollar (USD) is wavering this morning, trending mostly flat but faltering against its riskier assets, as USD investors await several significant data releases scheduled for this afternoon.
Up first, the latest JOLTs Job openings for June. The data is expected to report a fall from 8.14M to 8.03M while the latest consumer confidence index for July is also expected to report a fall, from 100.4 to 99.7.
Should both sets of data match their respective forecasts and decline, this could put pressure on the ‘greenback’ ahead of the Federal Reserve’s interest rate decision.
Scheduled for Wednesday evening, no policy chances are expected during this month’s meeting, and as such, USD investors will turn their focus to the central bank’s forward guidance.
With a September interest rate cut almost fully priced in, will any hawkish comments undermine these expectations? Or will a dovish consensus cement September rate cut bets and see USD plunge?
Pound (GBP) to remain listless ahead of interest rate decision?
The pound (GBP) is trending mostly flat this morning as a lack of economic data releases sees Sterling struggle to find a clear trajectory.
GBP investors may also be reluctant to place any aggressive bets ahead of the Bank of England’s (BoE) upcoming interest rate decision, scheduled for Thursday.
Following a slew of recently upbeat data releases, some economists are speculating that this may deter the BoE from enacting a rate cut this week.
Ruth Gregoy, Deputy Chief UK economist at Capital Economics said:
‘The economy’s recent strength and the stickiness of services inflation leads us to think that the Bank of England will wait until its September meeting to cut interest rate.’
However, with a rate cut on knife’s edge, with 50% of economists still pricing in an August interest rate cut, GBP could experience significant volatility towards the end of this week should the central bank decide to cut rates.
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