Sterling's Rebound Hinges on US Data as Fed Expectations Shift
The British pound's rebound has been supported by an upward revision to the United Kingdom's second-quarter growth, which rose to 1.4% year on year from 1.2%. Michael Boutros, StoneX Media Senior Market Analyst, notes that this revision offers some support for sterling but does not confirm a change in trend. The next directional test remains unresolved as markets reassess Federal Reserve expectations.
Boutros assesses the British pound's technical levels through weekly, daily, and four-hour charts while tracking scheduled data releases from both the UK and the US. He identifies resistance at 1.3302 to 1.3314 as the zone sterling needs to clear for a stronger near-term recovery signal.
The week is closing with significant data releases from the US, including private-sector ADP employment, non-farm payrolls, and core personal consumption expenditures price index. These figures will impact markets' views of Federal Reserve policy, with futures currently pricing a 56% chance of an October hold and a growing possibility of at least a 25-basis-point hike by year-end.