Ella 
Sterling was mildly bearish against the US dollar in Asia on Thursday, but there was a lack of follow-through selling and it remained close to the weekly top hit the day before. Spot prices are currently hovering around the psychological level of 1.3000 and are expected to extend the gains seen over the past three weeks.
A slight rise in U.S. Treasury yields helped the U.S. dollar index recover some of its strong losses from the previous day to nearly four-month lows, which was bearish for GBP/USD. However, market expectations that the Federal Reserve will start a rate cut cycle in September, coupled with bullish sentiment in global stock markets, may limit the upside of the safe-haven dollar.
GBP/USD advanced further to new highs, testing the area above the 1.3000 mark on Wednesday. Market expectations for a rate cut by the Federal Reserve (FED) in September have kept the U.S. dollar lower and the British Pound (GBP) higher in mid-week market trading. Recent comments from the Fed have been interpreted as staunchly dovish, with market participants seeing signs of a nod from Fed officials on recent progress on inflation measures. In addition, sterling traders will also need to pay close attention to any chain fluctuations caused by the European Central Bank (ECB) interest rate decision on Thursday.
When the U.S. Federal Open Market Committee (FOMC) held an interest rate conference call on September 18, the interest rate market had already priced in a 100% chance that the Fed would cut interest rates in September. At the meeting at the end of July, the central bank will keep interest rates unchanged. Change. There’s a 98% chance of a rate cut in September, according to CME’s FedWatch tool, and rates traders see three cuts in 2024, compared with the Fed’s own forecast of one or two cuts.
