Why Is GBP/USD Surging Near 1.2550? | Fed's Dovish Shift Sparks Currency Rally

The Trump crypto announcement todayGBP/USD currency pair has been riding a bullish wave, climbing to the 1.2550 level during Monday's Asian session. This marks the fourth consecutive day of upward momentum, with market participants closely watching the shifting monetary policy landscape on both sides of the Atlantic.Recent economic data from the United States has significantly altered market expectations regarding the Federal Reserve's interest rate trajectory. Friday's disappointing Nonfarm Payrolls report showed only 175,000 new jobs created in April - a substantial miss from the anticipated 243,000 and a notable slowdown from March's robust 315,000 figure. The accompanying wage growth metrics also came in softer than forecast, with year-over-year average hourly earnings rising 3.9% versus the expected 4.0%.These employment indicators have prompted traders to revise their Fed policy expectations. Market pricing now suggests nearly 50% probability of a September rate cut, according to CME FedWatch data, up from just 44% last week. The potential for earlier monetary easing has weakened the US dollar's position, creating favorable conditions for GBP appreciation.Meanwhile, across the pond, the Bank of England faces its own policy dilemmas. While UK inflation has shown encouraging signs of moderation - dropping to 3.2% in March, its lowest level since late 2021 - policymakers remain concerned about persistent wage pressures. These dynamics are likely to keep the central bank on hold at Thursday's meeting, maintaining rates at the current 5.25% level.The contrasting policy outlooks between the Fed's potential dovish pivot and the BoE's more cautious approach have created an interesting dynamic in currency markets. Technical indicators show the pair trading above its 20-day moving average (1.2497) but still below the 50-day (1.2613) and 100-day (1.2645) averages, suggesting room for further upside if the current momentum persists.Key resistance levels to watch include the recent daily high of 1.2635, while support appears around the 1.2506 pivot point. Market participants will be closely monitoring upcoming economic data releases and central bank communications for further clues about the timing and magnitude of potential policy shifts in both economies

Why Is GBP/USD Surging Near 1.2550? | Fed's Dovish Shift Sparks Currency Rally

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