The Pound Sterling (GBP) has declined against the US Dollar (USD), with the USD gaining strength amid expectations for further Fed rate cuts. The US Dollar Index (DXY) has rebounded from its recent low.
Fed Rate Expectations
The Federal Reserve (Fed) is expected to cut interest rates by 50 basis points (bps) in November, according to the CME Fedwatch tool. This expectation has increased following recent comments from Fed officials.
Economic Data
Investors will focus on the US Personal Consumption Expenditure (PCE) Price Index for August, which is expected to show a slight acceleration in inflation.
BoE Monetary Policy
The Bank of England (BoE) is expected to maintain a gradual approach to interest rate cuts. BoE officials have indicated that inflation pressures remain persistent, which could limit the extent of rate cuts.
GBP/USD Technical Analysis
The GBP/USD pair has pulled back from the 1.3400 level. The near-term outlook remains bullish, with support at the 20-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is above 60.00, suggesting strong bullish momentum.
