Pound US Dollar (GBP/USD) Firms amid Bullish Market Mood
The Pound US Dollar (GBP/USD) exchange rate is firming modestly this morning, amid a cheery market mood.
However, the lack of impactful data drivers is likely capping Sterling’s gains against the ‘Greenback’.
At the time of writing, GBP/USD is trading at around US$1.2401, a rise of just under 0.2% from the morning’s opening rates.
Will an Improving Market Mood Boost GBP?
Currently, the Pound (GBP) is struggling to find its footing, despite a moderately bullish market mood. As an increasingly risk sensitive currency, such moods usually benefit Sterling, but a lack of data catalysts is keeping a lid on GBP movement.
Over the course of today’s session, Sterling is likely to remain largely directionless. The lack of data releases means that investors may find little reason to support GBP, following recent downbeat releases.
This is likely to remain true for tomorrow’s session as well. Here, investors may be cautious around the Pound ahead of Wednesday’s key consumer price index data.
Because of this, the Pound may see little in the way of impactful movement as markets await more impactful data releases.
However, if the market mood begins to sour, GBP’s nature may cause it to weaken against safer assets such as the US Dollar.
USD to Climb on Fed Bets?
Over the course of today’s trade, the US Dollar (USD) is likely to rely on shifts in risk appetite to gain ground against its peers.
With little in way of impactful data releases today, investors may be hesitant to support USD unless the market mood sours significantly. This would, in turn, yield safe-haven flows for the ‘Greenback’, which would lift it against riskier assets such as the Pound.
So far, the US Dollar is struggling to find its footing during the session, as the mood amongst traders remains broadly upbeat.
On Tuesday, the focus is likely to begin to shift towards the Federal Reserve’s interest rate decision. If investors move to place bets on a surprise interest rate hike, the ‘Greenback’ may strengthen.
However, the current consensus is that the Fed will pause their current tightening cycle once again, which may yield little in the way of additional bets. As such, the US Dollar may struggle to gain ground against its peers.