- The Pound Sterling is projected to trade around 1.3550 against the US dollar ahead of the upcoming meeting between President Trump and Ukrainian President Zelensky at the White House.
- Many traders are optimistic about a potential interest rate cut by the Federal Reserve in September.
- Economists predict a steady increase in the UK’s core CPI at 3.7%.
The Pound Sterling (GBP) is expected to hover near the 1.3550 mark against the US Dollar (USD) during Monday’s European trading hours. Investors are keeping a close watch on the meeting between President Trump, Ukrainian President Zelensky, and NATO representatives, where they will discuss proposals presented by Russian President Vladimir Putin regarding the ongoing conflict in Ukraine.
On Friday, Trump and Putin met in Alaska to negotiate peace terms. According to reports, Trump stated that Putin was willing to freeze frontlines in exchange for full control of Donetsk, a key industrial region targeted by Moscow. However, Zelensky outright rejected the notion of relinquishing Ukrainian territory.
Market sentiment appears stable, with the S&P 500 futures showing a slight increase of 0.13% ahead of the Trump-Zelensky meeting. After this conference, any indications of a ceasefire between Moscow and Kiev could be positive for riskier assets. Still, it seems unlikely that favorable results from the meeting will significantly alter investor sentiment—many have already factored in the ongoing situation between Russia and Ukraine.
Daily Digest Market Movement: Anticipating UK CPI and the Jackson Hole Symposium
- Pound Sterling has started the week on stable ground, as traders await the release of July’s Consumer Price Index (CPI) data on Wednesday. Investors will particularly focus on inflation figures to gauge the future direction of the Bank of England’s (BOE) monetary policy. The core CPI, which excludes volatile categories like food and fuel, is expected to rise steadily at a rate of 3.7% annually.
- With persistent signs of inflation, the BOE may continue its cautious approach to monetary policy, holding the current rate at 4.25%, which was reduced by 25 basis points at an earlier meeting this month.
- In the US, all eyes are on the Jackson Hole Symposium set for August 21-23, where investors will listen carefully to Federal Reserve Chairman Jerome Powell for any new hints about interest rate policy.
- At this point, the US Dollar Index (DXY), which measures the dollar against six major currencies, is attempting to bounce back from a near three-week low around 97.60.
- The dollar has struggled following July’s Non-Farm Payroll (NFP) report, which indicated a cooling labor market, and there has been a sharp rise in market expectations for interest rate cuts by the Fed in September. The CME FedWatch tool now shows an 82.6% probability of such a reduction.
- On Friday, San Francisco Federal Reserve President Mary Daly mentioned in an interview with Fox Business that there is potential for interest rate cuts in September, even if the producer price index (PPI) had a faster increase in July, remaining within a 2% annual growth range.
Technical Analysis: Pound Sterling Trading Near 1.3550
Pound Sterling is expected to trade within a limited range around 1.3550 against the US dollar on Monday. The short-term outlook for the GBP/USD pair remains bullish, as it has surpassed the 20-day exponential moving average (EMA) and stands above approximately 1.3460 (EMA).
The relative strength index (RSI) for 14 days aims to exceed 60.00; a move above this threshold typically signals the emergence of new bullish momentum.
Looking downward, the August 11 low at 1.3400 serves as a significant support level, while the July 1 peak nearing 1.3790 acts as a key resistance point.
