The GBP/USD would likely remain in choppy trading conditions with central bank decisions lurking.The British pound remains under pressure amidst a week where a lot of central banks would feature their monetary policy meetings for September; being in the spotlight, the US Federal Reserve and the Bank of England, each estimated to raise rates by 75 and 50 bps, respectively. Therefore, the GBP/USD oscillates above/below the 1.1410 mark, for the second consecutive day, at the time of writing.
Global equities portray a dismal sentiment.Traders expect an aggressive Federal Reserve on Wednesday, and uncertainty about the Summary of Economic Projections (SEP) update keeps investors on their toes.
GBP/USD hovers around 1.1410 awaiting the central bank’s decisions
US housing data crossing newswires shows the sector is feeling higher interest rates by the US central bank. The US Commerce Department reported that US Home Building Permits dropped below expectations of 1.604M to 1.517M. Contrarily, Housing Starts rebounded 12.2%, crushing forecasts of 0.3%, while July data was revised down.
In the meantime, the US Dollar Index, a headwind for the GBP/USD, rises more than 0.30%, up at 109.985, underpinned by higher US Treasury bond yields. The US 10-year benchmark note rate sits at 3.596%, skyrocketing ten bps, reaching its highest level since April 2011.
Of late crossing newswires, the UK’s new Prime Minister Liz Truss said, “We have to look at all tax rates.” She added that the UK’s Chancellor would outline that the new government will be fiscally responsible on Friday.
That said, traders should expect choppy trading conditions in the GBP/USD ahead of both central bank monetary policy decisions. Wednesday’s UK economic docket will feature the Confederation of British Industry (CBI) Index, estimated to contract -13. The calendar will reveal US Existing Home Sales on the US front ahead of the FOMC’s monetary policy decision.
EUR/USD recovers toward parity as dollar retreats
EUR/USD staged a rebound and climbed toward parity after having dropped to a fresh daily low below 0.9960 earlier in the day. The US Dollar Index is struggling to preserve its bullish momentum as investors move to the sidelines ahead of the Fed’s policy announcements.
EUR/USD News
GBP/USD reclaims 1.1400 following earlier drop
GBP/USD reversed its direction and climbed above 1.1400 following a short-lasting dip below that level in the early American session. The cautious market mood ahead of key central bank announcements doesn’t allow the pair to gather recovery momentum.
GBP/USD News
Gold stays below $1,670 amid rising US yields
Gold is having a difficult time erasing its daily losses and continuing to trade below $1,670 in the second half of the day on Tuesday. The benchmark 10-year US Treasury bond yield is up 3% on the day near 3.6%, forcing XAU/USD to stay on the backfoot.
Free Forex Signals 