GBP/USD Fizzles Past the 1.26 Milestone
On Thursday morning, the British pound gave the US dollar a quick cheer‑up, leaping past 1.2600. Today it’s hovering a touch above 1.2638, a modest 0.04 % climb that has traders scratching their heads and coffee mugs in hand.
Why the Pound’s Feel‑Good Vibes?
- US & UK PMI Buzz: Market focus is on both countries’ February Purchasing Managers’ Indexes. Tightening data could keep the pair bullish.
- FOMC Minutes‑Scoop: Last week’s January release had Fed officials stressing the perils of hasty rate cuts while reminding everyone that inflation is still on a comeback trail.
- Bank of England’s Spell‑Check: Swati Dhingra warned that late rate cuts would hurt living standards, but reassured that UK inflation is already on the decline—so easing is on the table.
Fed’s Mindset vs. UK’s Reality
The Fed’s cautious tone—citing the need to “accurately assess incoming data” for a –2 % goal—paired with BoE’s patience creates a tug‑of‑war in the forex market. If UK inflation drops faster, the two‑quarter recession the country has stumbled into might become a footnote rather than a headline.
Dollar’s Not‑So‑Rock‑Solid Rally
The US Dollar Index (DXY) is still trimming its gains, slipping to roughly 104.00. Even a supportive PPI (US producer prices) last Friday couldn’t keep the dollar’s weekly losses at bay.
What’s Up Next? The “Must‑See” Data
- UK S&P Global/CIPS PMI – February
- US S&P Global PMI – February
- Weekly initial jobless claims
- Existing home sales
- Federal Reserve Bank of Chicago’s National Activity Index
Fed Speaks Ahead
Key figures—Kocherlakota, Kashkari, Jefferson, and Harker—are slated to talk. Their insights could trigger wild price swings, so strap in if you’re trading today or tomorrow.
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