"GBP/USD Around 1.2310 Amidst Death-Cross Formation"
Updated
GBP/USD broke above 1.2300 for the first time since September 22 on Wednesday but struggled to gather more upward momentum. The negative sentiment in risk appetite could limit the pair's gains in the near term. However, the US Dollar (USD) may find it challenging to maintain its strength if policymakers continue with dovish remarks.
San Francisco Federal Reserve President Mary Daly and Atlanta Federal Reserve President Raphael Bostic both argued on Tuesday that current policies are restrictive enough to bring inflation back to the 2% target. Bostic stated that there's no need for further rate hikes, and Daly noted that recent US rate increases could be seen as equivalent to another rate hike.
Taking a more hawkish view, Federal Reserve Governor Michelle Bowman mentioned that policy rates may need to rise further and remain restrictive for a time to bring inflation back to the Fed's target, given strong spending and tight labor market conditions. This last comment seems to be helping the USD maintain its position.
Meanwhile, US stock index futures traded virtually unchanged during the day, indicating that investors are not yet ready to bet on an extended risk-on phase.
In the latter part of the day, Federal Reserve Atlanta President and Federal Reserve Governor Christopher Waller will give speeches. Bostic has made it clear that he wants the Fed to hold the policy rate steady, so his comments may not cause a notable market reaction. The last time Waller spoke, he mentioned needing to see more data to confirm that the Fed had completed rate hikes. In the case that Waller notes there's no need for further tightening, the USD may continue to weaken against its counterparts.
San Francisco Federal Reserve President Mary Daly and Atlanta Federal Reserve President Raphael Bostic both argued on Tuesday that current policies are restrictive enough to bring inflation back to the 2% target. Bostic stated that there's no need for further rate hikes, and Daly noted that recent US rate increases could be seen as equivalent to another rate hike.
Taking a more hawkish view, Federal Reserve Governor Michelle Bowman mentioned that policy rates may need to rise further and remain restrictive for a time to bring inflation back to the Fed's target, given strong spending and tight labor market conditions. This last comment seems to be helping the USD maintain its position.
Meanwhile, US stock index futures traded virtually unchanged during the day, indicating that investors are not yet ready to bet on an extended risk-on phase.
In the latter part of the day, Federal Reserve Atlanta President and Federal Reserve Governor Christopher Waller will give speeches. Bostic has made it clear that he wants the Fed to hold the policy rate steady, so his comments may not cause a notable market reaction. The last time Waller spoke, he mentioned needing to see more data to confirm that the Fed had completed rate hikes. In the case that Waller notes there's no need for further tightening, the USD may continue to weaken against its counterparts.
Note
EU/USD is trending downward!!
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