Notable events today:
15:30 GMT+3. USD – Durable Goods Orders
GBPUSD:
GBP/USD is losing momentum in its recovery to around 1.2695 in early Asian trading on Friday. The major currency pair has retreated from recent highs around 1.2760 and is declining amid renewed demand for the US Dollar (USD). Data on US durable goods orders and Michigan Consumer Sentiment is due to be released later on Friday.
On Thursday, the S&P Global Composite flash PMI rose to 54.4 for May from 51.3 in April, beating the consensus estimate of 51.1. The reading was the highest since April 2022. Meanwhile, the manufacturing PMI rose to 50.9 in April from a previous 50.0. The services PMI for the same period improved to 54.8 from a previous 51.3. Both measures beat market expectations.
Rising input prices in manufacturing indicate that inflation may accelerate in the coming months, potentially prompting the Federal Reserve to postpone interest rate cuts this year, which would provide some support to the US Dollar and pose a headwind for the GBP/USD pair.
Meanwhile, investors have lowered their expectations that the Bank of England (BoE) will cut interest rates next month following the release of the UK CPI inflation report earlier this week. Investors see a roughly 50% chance of the first rate cut coming in August, with a quarter-point hike not being fully priced in until November.
Trade Recommendation: Monitor the 1.2700 level and enter a short position on any bounce.
Source: FreshForex
https://forexnews.pro/2024/05/24/gbpusd-forecast-possible-rejection-of-a-fed-rate-cut-supports-the-dollar/
