Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
GBP/USD Rate Outlook Hinges on Fed Economic Symposium

GBP/USD Rate Outlook Hinges on Fed Economic Symposium

David Song, Strategist
GBPUSD Chart

Chart created with TradingView

British Pound Talking Points

GBP/USD trades to a fresh monthly low (1.3602) ahead of the Kansas City Fed Economic Symposium scheduled for August 26 – 28 as a growing number of Federal Reserve officials show a greater willingness to taper the quantitative easing (QE) program.

Fundamental Forecast for British Pound: Bearish

GBP/USD appears to be on track to test the July low (1.3572) amid speculation for a looming shift in Fed policy, and details of a potential exit strategy may fuel the recent rally in the US Dollar as “economic growth was expected to remain strong over the second half of the year, supported by the further reopening of the economy, accommodative financial conditions, and easing of supply constraints.”

The minutes from the July meeting suggest the Federal Open Market Committee (FOMC) is on track to scale back monetary support as most participants “judged that the standard set out in the Committee's guidance regarding asset purchases could be reached this year,” and the Fed symposium may offer clues for the next interest rate decision on September 22 as officials emphasize “the economy's continued recovery as well as its progress toward the Committee's maximum-employment and price-stability goals.”

However, Fed officials may merely attempt to buy time as “several participants emphasized that employment remained well below its pre-pandemic level,” and more of the same from Chairman Jerome Powell and Co. may produce headwinds for the US Dollar as the FOMC “generally judged that the Committee's standard of ‘substantial further progress’ toward the maximum-employment and inflation goals had not yet been met.”

With that said, details of a potential Fed exit strategy may keep GBP/USD under pressure as it fuels speculation for an imminent shift in monetary policy, but the US Dollar may face headwinds if central bank officials endorse a wait-and-see approach ahead of its next meeting in September.

GBP Forecast
GBP Forecast
Recommended by David Song
Download the DailyFX Forecast for GBP
Get My Guide

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES