British Pound (GBP) Price Outlook: GBP/USD Still Edging Lower as USD Rises
GBP price, news and analysis:
- GBP/USD continues to trade broadly sideways with a small bias lower.
- That reflects principally US Dollar strength as speculation grows that the Federal Reserve will tighten US monetary policy earlier than analysts had previously forecast.
GBP/USD biased to the downside
Analysts are continuing to speculate that the Federal Reserve will tighten US monetary policy earlier than previously expected after last week’s strong US jobs data. That’s helping to lift the US Dollar all round and has knocked back pairs like GBP/USD although, as the chart below shows, the bias to the downside is quite weak.
GBP/USD Price Chart, Hourly Timeframe (July 28 – August 10, 2021)
Source: IG (You can click on it for a larger image)
In addition, the US Dollar is being supported by news that the US Senate will vote today on a $1 trillion infrastructure bill that is expected to pass. However, it will still have to be passed by the House of Representatives sometime after the House returns late next month from its summer break.
Nearer term, the next move in pairs like GBP/USD could hinge on the US inflation data due tomorrow. The headline rate is predicted to ease to 5.3% year/year, down from the previous 5.4%.
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.