Ella 
In early trading in Asia on Wednesday, GBP/USD remained on the defensive, near 1.2840. Markets are likely to be more cautious ahead of Wednesday’s Federal Reserve (Fed) interest rate decision and Thursday’s Bank of England (BoE) policy meeting.
The Fed is expected to keep interest rates steady at its July monetary policy meeting on Wednesday. Since July 2023, the Federal Reserve has maintained the benchmark funds rate within a range of 5.25%-5.50%. This is also the longest time the Federal Reserve has maintained restrictive monetary policy in decades.
Market participants will be closely watching Federal Reserve Chairman Jerome Powell’s speech for more clues on the future path of policy rates. The market expects the Federal Reserve to launch easing policies as soon as September because inflation is close to the Fed’s 2% target.
Data released on Tuesday showed that JOLTS job openings in the United States fell to 8.184 million in June, while the revised value in May was 8.23 million, higher than the expected value of 8.03 million. At the same time, the U.S. consumer confidence index rose to 100.3 in July from a revised 97.8 in June. The figure was higher than expectations at 99.7, Conference Board data showed.
In terms of sterling, investors continued to price in the prospect of a possible interest rate cut by the Bank of England on Thursday, dragging GBP/USD lower. Reuters reported that trading believes that the chance that the Bank of England will reduce borrowing costs by 25 basis points to 5% is close to 58%.
