GBP/USD Remains Above 1.2850, Awaiting Fed and BoE Rate Decisions This Week

The GBP/USD pair remains positive around 1.2885 during Monday's Asian trading session. This uptick is supported by a weaker US Dollar (USD) due to expectations of a potential interest rate cut by the Federal Reserve (Fed) in September. The upcoming monetary policy meetings of the Fed and the Bank of England (BoE) later this week are anticipated to be significant.

Most analysts and traders predict that the Fed will maintain the current interest rate at its meeting on Wednesday. However, there is speculation that the Fed may hint at upcoming rate cuts, with the first expected by mid-September. According to the CME FedWatch Tool, investors are pricing in a 100% chance of a quarter-point rate cut by then.

Traders will also be attentive to the FOMC press conference for further cues. A dovish stance from the FOMC could weaken the Greenback and provide support for GBP/USD.

Regarding the GBP, there is speculation that the BoE might implement its first rate cut since 2020 during its meeting on Thursday. The market currently assigns a 50% probability to a quarter-point rate cut this week, although opinions are divided on whether the cut will occur now or be deferred to the September meeting.

Paraphrasing text from "FX Street" all rights reserved by the original author.