The GBP/USD pair is expected to finish the week with gains close to 3%, despite the UK’s bond crisis. The US PCE reading increased the likelihood of the Fed going 75 bps as Fed officials reinforced their hawkish stance.
The GBP/USD pair is recovering from earlier losses as the US session progresses, even though the market sentiment shifted sour as Fed officials reinforced their hawkish message of keeping interest rates higher for longer. Therefore, the GBP/USD is trading at 1.1168, gaining 0.46%, after reaching a daily low of 1.1024.
The US Department of Commerce revealed that the Federal Reserve preferred inflation measure, the PCE, rose by 0.3% MoM in August, above estimates of 0.1%, while the annual reading decelerated from 6.3% to 6.2%. In the meantime, the so-called Core PCE, which strips volatile items like food and energy, exceeded estimates at 0.6% MoM, while the YoY rose by 4.9%, also above forecasts.
On the Uk side, the British pound has recovered from reaching 1.0300 levels on a YTD low last Friday, courtesy of new Primer Minister Liz Truss’ tax-cutting plans to stimulate the economy. That triggered one of the most volatile sessions, sending the GBP/USD tumbling from daily highs of 1.0900 to 37-year lows of 1.0356.
Tags gbp/usd hawkish stance pce
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