Pound Sterling Trades Near Six-Week Low Amid Weak Market Sentiment

During Tuesday’s London session, the Pound Sterling (GBP) remained confined within a narrow range near a six-week low around 1.2540 against the US Dollar (GBP/USD). The lackluster performance of the GBP/USD pair is primarily attributed to subdued market sentiment.

The near-term outlook for the Cable appears pessimistic as traders adjust their expectations regarding the timing of the Federal Reserve’s (Fed) first rate cut, which was previously anticipated to occur during the June meeting. This shift in sentiment, after more than two years of expecting rate cuts, stems from the prospect of interest rates remaining higher for a longer duration than initially anticipated. Consequently, this benefits the US Dollar, exerting downward pressure on the GBP/USD pair.

The robust recovery observed in the United States manufacturing sector, signaling a strong economic outlook, has prompted traders to recalibrate their expectations regarding rate cuts by June. The increased demand in the US manufacturing sector indicates solid household spending, providing Fed policymakers with the leeway to postpone interest rate cuts. This optimistic economic outlook allows the Fed additional time to assess inflation data before considering rate adjustments.

Amid cautious market sentiment, the Pound Sterling faces significant headwinds, while the US Dollar Index (DXY) continues to register fresh four-month highs slightly above 105.00. This uptrend in the US Dollar is bolstered by a buoyant safe-haven bid and optimistic prospects for the US economy.

As uncertainty prevails in global markets, investors are eagerly awaiting the release of the Nonfarm Payrolls (NFP) data for March by the US Bureau of Labor Statistics (BLS) on Friday. Prior to this, market participants will closely monitor the US JOLTS Job Openings data for February, scheduled for publication at 14:00 GMT. These upcoming data releases are expected to provide further insights into the health of the US labor market, influencing market sentiment and currency movements accordingly.

GBP latest articles

Popular exchange rates

foreign exchange

fxcurrencyconverter is a forex portal. The main columns are exchange rate, knowledge, news, currency and so on.

© 2023 Copyright fxcurrencyconverter.com