GBPUSD InsightHello, subscribers!
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Key Points
- The Federal Reserve cut rates by 25 basis points during the December FOMC meeting.
- Through the dot plot, the Fed hinted at a total of 50 basis points of rate cuts next year.
- Fed Chair Jerome Powell mentioned during the press conference that the Fed’s policy stance is now significantly less restrictive and that it may be more cautious when considering further adjustments to the policy rate.
- Markets interpreted the Fed’s rate cut as reluctant and viewed it as extremely hawkish.
- The BOJ and BOE are set to announce their rate decisions today, with expectations of no changes.
Key Economic Indicators
+ December 19: BOJ rate decision, BOE rate decision
+ December 20: U.S. November Personal Consumption Expenditures (PCE) Price Index
GBP/USD Chart Analysis
The dollar’s strength, influenced by the Fed’s hawkish stance, has led to a steep decline in GBP/USD. The pair has broken below the 1.26000 level, signaling a potential further drop toward the 1.25000 level. In the short term, additional declines are possible, and if GBP/USD falls below 1.25000, the pair may extend its losses to 1.23000. However, if a rebound occurs at the 1.25000 level, a rise toward 1.27000 could be expected.
