GBP/USD bulls printing fresh bull cycle highs – by fx_ross GBPUSD Currencies DollarIndex Fed BOE
slides deeper into what might be regarded as a meanwhile critical supporting area on the DXY´s daily chart. The price has traveled between a low of 1.2477 and a high of 1.2537 on the day so far and at the time of writing, the price is perched near the highs of the day at 1.2530, up 0.37%.
The British pound has been touching its strongest level since June 2022, as traders access the landscape across the pond with both US and UK data sending signals to markets as to how the two central banks are likely to respond. For the US, there has been a series of data that is pointing to a pivot from the Federal Reserve and a mild recession later this year. There are signs of easing inflationary pressures and a slowdown in the country's labor market, both of which have started to reinforce the chances the Federal Reserve will be delivering a final rate hike in May before pausing its tightening cycle. This has seen the DXY index fall to as low as 100.84 and 200 points lower than the highs of the week.
Furthermore, other data on Thursday showed that the number of Americans filing new claims for unemployment benefits increased more than expected last week, another sign that what has otherwise been considered a tight labor market is easing, up as higher borrowing costs, for which the Federal Reserve has triggered in its monetary policy path to date, has dampened demand in the economy.
As such, the data is boosting expectations that the Federal Reserve is near the end of its rate hiking cycle. Fed funds futures traders are now pricing for the Fed's benchmark rate to peak at 5.002% in June, from 4.830% now, before falling back to 4.278% in December.
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