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GBP/USD slips as Fed rate-hike odds rise

FXStreet notes the pair is holding below the 20-day EMA near 1.3537, with the next support seen around 1.3418.

Reported · Written up by our desk · Major Pairs

The British pound edged lower against the US dollar, with GBP/USD down about 0.1% to near 1.3500 in European trading, as the US dollar extended its advance, according to FXStreet.

The move reflects rising expectations for tighter Fed policy, with market participants pricing in a 25 basis point rate hike this month. CME FedWatch data cited by FXStreet shows a 67% chance of a hike.

FXStreet also pointed to commentary from Bank of England Monetary Policy Committee member Catherine Mann, who said it is better to set rates “a little bit too high” and correct later if needed. Mann linked her stance to the “underpinnings” of the 25 basis point hike she voted for previously, and she favored an earlier move to counter risks from elevated inflation projections.

On the technical front, FXStreet said GBP/USD is trading with a mildly bearish bias while below the 20-day EMA near 1.3537, and the RSI around 48 has eased toward neutral. The first support area is near 1.3418 at the lower end of a rising channel, while a daily close back above the 20-day EMA would be expected to ease downside pressure.

Latest closeGBP/USD 1.351 ▼0.3%

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