Forex Analysis by Fawad Razaqzada covering: EUR/USD, GBP/USD, EUR/USD exchange rate cash Futures, EUR/USD Future. Read Fawad Razaqzada's latest article on Investing.com
, as well as global PMI figures to look forward to this week. The BoE could deliver a final 25 bps hike, while the FOMC is seen holding policy unchanged. I think the cable could be heading towards the low 1.20s.Before discussing the FOMC and BoE, i.e., this week’s key macro events for GBP/USD, let’s have a quick look at the
So, keep a close eye on the policy statement and the latest dot plots, and hear what Powell says at the FOMC press conference. The Fed may indicate that one more hike is likely before the year is out – thanks to a slower disinflation process that has undoubtedly been boosted by a stronger US consumer and higher inflation expectations. The FOMC may upwardly revise the 2024 median plot to point to fewer rate cuts than the 100 bps it had projected previously.
The BoE will have seen the latest CPI data that will be released the day before their rate decision. Given that economists expect an uptick in CPI from the month before, this is unlikely to discourage the MPC from voting for, what many expect, another 25-basis point rate increase to take the Bank Rate to 5.50%.
Goldman is not alone in massively scaling back expectations for any future tightening. Investors also seem to have made up their minds. Weaker data from the UK has seen investors re-price their Bank of England rate hike expectations lower. Around 75 bps worth of hikes was priced in about a month ago. Now, the markets are expecting around 35 bps until the peak. This means that the is a good chance the BoE could deliver a final 25bp hike on Thursday, like the ECB signalled last week.
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