GBP/USD could reclaim 1.2700 on a dovish Fed tone

The Pound Sterling (GBP) remains under pressure on Wednesday’s European morning as markets brace for the US Federal Reserve’s (Fed) monetary policy meeting. Investors see the Fed leaving interest rates unchanged in the range of 5.25%-5.50%, shifting their focus towards any  guidance about when the central bank will start cutting interest rates and at which speed. In its last monetary policy meeting, the Fed projected a 75-basis-points (bps) reduction in interest rates in 2024.

The GBP/USD pair trades broadly sideways, but a defined action is expected after the Fed and Bank of England (BoE) announce their first monetary policy decisions of 2024. The BoE is also expected to maintain the status quo for the fourth time in a row. Price pressures in the United Kingdom economy have peaked now, but  investors lack confidence about inflation returning to the 2% target in a sustainable manner. Read more…

GBP/USD touched it lowest level in two weeks below 1.2650 on Tuesday but managed to stage a rebound in the late American session. The pair holds steady below 1.2700 on Wednesday as investors gear up for the Federal Reserve’s (Fed) policy announcements.

The Fed is forecast to hold the policy rate steady at 5.25%-5.5% following the first meeting of the year. Several Fed policymakers pushed back against the market expectation for a rate cut in March ahead of the blackout period and helped the US Dollar stay resilient against its rivals. Read more…