GBP/USD Bulls And Bears Struggle at the Beginning of the Week Ahead of Central Banks, the Fed, and the BoE
Bears in the GBP/USD pair are aligned ahead of the Fed and the BoE. The data has been unkind to the pound, and this week could bring more bad news.

GBP/USD fell on Friday due to concerns that the Bank of England (BoE), which meets this week, may be prompted by the United Kingdom's economic slowdown to halt its rate hike cycle sooner than anticipated. GBP/USD is trading at 1.2390 at the time of writing and has moved between 1.2372 and 1.2404 thus far.
The US Dollar is thinly traded in the open market and is not exerting a major influence on foreign exchange, with currencies such as the Australian Dollar advancing and the British Pound declining. The upcoming week will be busy with both the Bank of England and Federal Reserve. The BoE is anticipated to raise rates by 50 basis points. However, over a third of economists surveyed by Bloomberg anticipate a lower 25 basis point increase.
"Indeed, WIRP predicts only 55% odds of a 50 bp raise, down from 85% at the start of last week," analysts at Brown Brothers Harriman said, adding that the odds of a 25 bp hike on March 23 are no longer completely priced in. "Thereafter, the probability of a final 25-bp increase in June or August would approach 60%, resulting in a high bank rate near 4.5 percent," Recall that the 6-3 vote for the 50 bp hike at the previous meeting on December 15 was unexpected because Dhingra and Tenreyro opted to maintain the status quo and Mann voted for a larger 75 bp shift. This week, updated macro forecasts will be issued.
As for the data, again a thorn in the side for the Pound, analysts predict that consumer credit for December will be released on Tuesday, followed by the final manufacturing PMI for January and the final services and composite PMIs as the final data of the week. As the full impact of monetary and fiscal tightening has yet to be felt, the figures are likely to continue deteriorating.
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