- Sterling’s value is projected to fall to around 1.3460 against the US dollar following the dismissal of Governor Cook by President Trump.
- This upheaval is raising fears about the independence of the Federal Reserve.
- Market watchers are looking forward to Bo Mann’s upcoming speech for insights into future monetary policy.
The Pound Sterling (GBP) is expected to dip closer to the US Dollar (USD) at roughly 1.3460 during trading in Europe on Tuesday. This slight fall in the GBP/USD pair follows the controversial removal of US Governor Lisa Cook by President Trump, leading to mounting worries regarding the Fed’s autonomy.
Earlier, Trump released a letter stating the reason for Cook’s dismissal was her alleged misleading statements regarding mortgage agreements.
Analysts consider Trump’s action against Cook to be a significant blow to the independence of the central bank. Many believe that it is part of an effort to bring personnel into the Federal Open Market Committee (FOMC) who would align more closely with Trump’s economic policies.
“The real issue is the intentions behind these changes. It’s not just about protecting the Fed’s independence; it feels more like positioning Trump’s allies within the organization,” commented a Capital.com analyst.
In response, Cook has indicated that she plans to continue fulfilling her role as federal governor. Through her lawyer, she stated, “Trump claims he has a valid reason to dismiss me, but there’s no legal basis for such an action, and he lacks the authority to do so.”
Historically, Trump has frequently criticized the Fed’s independence, even targeting Chairman Jerome Powell for not reducing interest rates. Yet, Trump notably praised Powell following his recent address at the Jackson Hole Symposium, where Powell hinted at concerns in the labor market.
Market Summary: Stability Before Bowman’s Speech
- Pound Sterling remains steady ahead of Bo Mann’s speech scheduled for 16:00 GMT. Investors are keenly observing for any hints regarding potential interest rate cuts by the Bank of England (BoE) this year.
- There’s skepticism among market players about further easing of monetary policy given persistent inflationary pressures in the UK.
- Notably, Mann was among the BoE Monetary Policy Committee members voting to keep interest rates steady at their last meeting, where the main borrowing rate was lowered to 4% from 25 basis points.
- In the US, attention is also on the Personal Consumption Expenditure (PCE) Price Index data for July, set to be released this Friday, as inflation trends could influence Fed policies.
- The CME FedWatch tool indicates an 84% probability that the Fed will implement a rate cut at its next meeting in September.
- Earlier this month, the Fed had to revise down its forecasts following weaker-than-expected job growth reported for May and June.
Technical Analysis: Fluctuations in Sterling
The pound is trending slightly upward against the dollar, reaching around 1.3460. The current outlook for the GBP/USD pairing remains hesitant as it hovers near the 20-day exponential moving average (EMA).
The 14-day relative strength index (RSI) is oscillating between 40 and 60, indicating a possible decline in volatility.
Support can be found around the August 11 low of 1.3400, while resistance is noted at the peak around 1.3790 witnessed on July 1.
Upcoming Economic Indicators
Bo Mann’s Speech
Dr. Katherine Mann has been part of the MPC at the Bank of England since September 1, 2021. With a rich background in economics, including previous roles on various economic boards, her insights are highly anticipated.
Next release: August 26th, 2025 at 16:00
Frequency: Irregular
Previous: –
Source: Bank of England
