- Bowman suggests that GBP/USD is likely to rise from a low of 1.3369, citing the appropriateness of the interest rate cuts in July.
- Recent tensions involving the US and Iranian nuclear sites have led to market fluctuations. Meanwhile, the Iranian parliament has voted to block the Strait of Hormuz.
- The UK’s Flash Services PMI is projected to improve to 51.3, while US manufacturing data exceeds expectations, but service figures may decline slightly.
The Pound Sterling (GBP) has seen a 0.37% increase against the US dollar during the North American trading session. There’s been a boost in risk appetite amid developments in the Middle East. As of now, GBP/USD is valued at 1.3500.
Sterling rises 0.37% as Dovish Fed comments offset Middle East risk surges and improve risk appetite
Over the weekend, the US launched an attack on Iran’s nuclear site, creating a risk-averse start to the trading week. The dollar strengthened, impacting oil prices, although WTI has recently been under selling pressure.
With tensions in the Middle East running high, Iran has authorized the closure of the Strait of Hormuz and conducted missile strikes on Israel. US officials have indicated that Iran may retaliate within the next couple of days. That said, the White House is still pursuing a diplomatic solution, according to reports.
A statement from Federal Reserve Governor Michelle Bowman, supporting interest rate cuts in July, has put some downward pressure on the US dollar. The GBP/USD pair rebounded from a daily low of 1.3399 close to the 50-day simple moving average (SMA).
The US S&P Global Manufacturing PMI for June came in at 52, exceeding expectations, but showing no change from previous readings. Meanwhile, the Services PMI dropped from 53.7 to 53.1 in June, still surpassing the estimate of 52.9.
On the UK side, the economy appears to be on a path to recovery as the S&P Global Services Flash PMI increased from 50.9 in June to 51.3, aligning with forecasts. Nonetheless, the production PMI continues to show contraction, recorded at 47.7, slightly lower than the anticipated 46.6.
GBP/USD price forecast: Technical outlook
The upward trend for GBP/USD remains in play but is encountering strong resistance. Buyers need to push the exchange rate above the 20-day Simple Moving Average (SMA) at 1.3508 for better positioning toward yearly highs of 1.3550, 1.3600, and 1.3631. If the rate closes below 1.3500, it could lead to pullbacks, with sellers targeting the 50-day SMA at 1.3399.
British pound prices this week
The rates for the British pound (GBP) against various major currencies are summarized below. The pound has shown the strongest performance against the New Zealand dollar this week.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.70% | -0.66% | -0.18% | -0.07% | 0.06% | 0.08% | -0.50% | |
| EUR | 0.70% | 0.02% | 0.57% | 0.65% | 0.73% | 0.80% | 0.16% | |
| GBP | 0.66% | -0.02% | 0.59% | 0.63% | 0.70% | 0.77% | 0.15% | |
| JPY | 0.18% | -0.57% | -0.59% | 0.09% | 0.21% | 0.31% | -0.41% | |
| CAD | 0.07% | -0.65% | -0.63% | -0.09% | 0.17% | 0.15% | -0.48% | |
| AUD | -0.06% | -0.73% | -0.70% | -0.21% | -0.17% | 0.05% | -0.56% | |
| NZD | -0.08% | -0.80% | -0.77% | -0.31% | -0.15% | -0.05% | -0.62% | |
| CHF | 0.50% | -0.16% | -0.15% | 0.41% | 0.48% | 0.56% | 0.62% |
The heatmap below illustrates how major currencies are changing in relation to one another. The base currency is listed in the left column, while the estimated currency is across the top. For instance, if you trace the British pound to the US dollar, the corresponding rate change is displayed in the box.
