Pound Rises As Traders Await Fed Powell, BoE Bailey Speeches
The British pound strengthened against other major currencies in the European session on Friday, as trader’s braced for Fed Chair Jerome Powell’s Jackson Hole speech later in the day for confirmation U.S. rate cuts would start in September. The Bank of England governor Andrew Bailey is also scheduled to speak at the symposium.
With a recession looming large on the world’s largest economy and inflationary pressures abating, markets currently expect the U.S. Federal Reserve to deliver three quarter-point rate cuts at each of the remaining three meetings of 2024.
Traders also speculate that the Bank of England is likely to slower the policy easing cycle than that of other major central banks.
The Sterling held steady against its major counterparts in the Asian session today.
In the European trading today, the pound rose to more than a 1-year high of 1.3137 against the U.S. dollar, from an early low of 1.3092. The GBP/USD pair may find its resistance around the 1.33 region.
Against the euro and the Swiss franc, the pound advanced to a 3-week high of 0.8467 and a 3-day high of 1.1195 from early lows of 0.8494 and 1.1143, respectively. On the Upside, 0.82 against the euro and 1.12 against the franc are seen as the next resistance levels for the pound.
The pound edged up to 191.90 against the yen, from an early low of 190.38. The next possible resistance level for the GBP/JPY pair is seen around the 194.00 region.
Looking ahead, Canada retail sales for July, U.S. building permits for July, home sales for July and U.S. Baker Hughes oil rig count data are due to be released in the New York session.
