GBP/USD rebounds from lows as Fed officials' comments and US services sector data influence currency dynamics
The Institute for Supply Management (ISM) revealed a softer-than-expected Services PMI, along with Fed Chair Jerome Powell, reaffirming that interest rates would be cut, but it would depend on upcoming data. On the contrary, Atlanta’s Fed President Raphael Bostic stood by his stance of just one rate cut, adding that it could happen in the last quarter of 2024.
In the meantime, US Treasury yields trimmed its earlier gains a headwind for the buck. The US Dollar Index (DXY) which tracks the performance of the American currency against other six, tumbles 0.46%, down at 104.26. This comes after the release of the ISM Manufacturing PMI sent the DXY rallying to the 105.00 mark.
Bank of England and Fed rate cut expectations
Money market futures traders see the Bank of England (BoE) cutting rates 25 basis points in June, with odds standing at 66%. Across the Atlantic, traders had fully priced in a 25-basis point cut by the Fed until July 31.
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