💱 Market Overview
- GBP/USD fell to around 1.3470 during Wednesday’s European session.
- The Pound Sterling (GBP) is under pressure due to:
- Weak UK business activity data
- Strengthening US Dollar, supported by Fed Chair Powell’s comments
🏦 Federal Reserve Commentary
- Fed Chair Jerome Powell signaled a cautious approach to interest rate cuts.
- Powell said inflation risks remain elevated, while the labor market is softening.
- Quote: “Near-term risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation.”
- Powell emphasized that current interest rate levels allow flexibility for future adjustments.
🔁 Contrasting View:
- Fed Governor Michelle Bowman supported quicker rate cuts, warning that weak demand could lead to job losses.
🇬🇧 UK Economic Data: September PMI Report
- S&P Global Composite PMI:
- 📉 Fell to 51.0 (vs. expected 52.7, previous 53.5)
- Indicates slower growth in UK business activity
- Manufacturing PMI:
- ❌ Dropped to 46.2 (vs. expected 47.0) → Contraction (<50)
- Services PMI:
- 📉 Fell to 51.9 (vs. expected 53.5, previous 54.2)
📉 Key Insights from PMI Report
- Manufacturing weakness continues
- Job losses and reduced foreign demand persist
- Suggests possible dovish shift from the Bank of England (BoE)
🏦 Bank of England Outlook
- BoE kept rates unchanged at 4% last week
- Maintains “gradual and careful” monetary easing guidance
- Inflation in the UK is still above the 2% target, but expected to peak near 4% in September
- BoE Chief Economist Huw Pill expressed confidence in inflation easing soon
💹 GBP/USD Technical Analysis
- GBP/USD trades near 1.3485, below the 20-day Exponential Moving Average (EMA) at 1.3523
- Pair remains within a Rising Channel, near the lower boundary
- 14-day RSI dropped below 50.00. Further downside likely if it breaks below 40.00
🔻 Support Level:
- 1.3140 (August 1 low)
🔺 Resistance Level:
- 1.3800 (July 1 high)
💵 British Pound Performance Against Major Currencies
- The British Pound (GBP) is broadly weaker, especially against:
- Australian Dollar (AUD): -0.53%
- US Dollar (USD): -0.32%
- Euro (EUR): +0.08% (slightly stronger)
- GBP is among the weaker performers in the currency basket today
📅 Upcoming Key US Data to Watch
- Thursday: US Durable Goods Orders
- Friday: US Personal Consumption Expenditures (PCE) Price Index for August
These releases could significantly impact GBP/USD price direction.