The Pound Sterling is holding steady against the US Dollar despite recent declines. Market expectations for Bank of England rate cuts have softened, with a 25bps reduction anticipated by August 7 and a further easing reduction by year-end recently reduced by 5bps.<\/p>\n
The latest CFTC data shows a change in GBP sentiment, with a shift from a $2.4 billion net long position to a neutral stance. Technically, the GBP appears vulnerable as recent lows dipped below mid-July support levels, hinting at a possible trend shift. A move towards 1.34 would stabilise the view, while fresh lows towards 1.33 would indicate a bearish shift.<\/p>\n
Elsewhere, EUR\/USD remains down below 1.1550, recovering after touching 1.1500 following US data. GBP\/USD is testing support at 1.3300 as strong USD buying continues amid anticipation for FOMC and NFP events. Gold sees limited gains, stalling at $3,330 per ounce amid cautious sentiment before the Fed’s rate decision. Ethereum reaches a year-to-date high, approaching $4,000, driven by strong institutional demand with ETFs gaining 1.6 million ETH in recent weeks.<\/p>\n
The Federal Reserve’s decision to delay rate cuts faces scrutiny due to tariff uncertainties and economic resilience, though delayed action may expose weaknesses in the labour market.<\/p>\n
The British Pound’s apparent stability is misleading, and we see its vulnerability growing ahead of the Bank of England’s August 7th meeting. With the market now pricing in a 25-basis-point rate cut, the path of least resistance appears to be lower for the currency. The latest Commitment of Traders report confirmed this sentiment shift, showing non-commercial positions decreasing by over 30,000 contracts, the largest single-week drop this year.<\/p>\n
Given this backdrop, we believe traders should view any rallies toward the 1.3400 level as opportunities to initiate bearish positions. A decisive break below the 1.3300 support level, which has been tested multiple times this month, would likely trigger further selling. Put options with a late August expiry could be an effective way to position for a potential decline while capping risk.<\/p>\n
The dominant theme remains US Dollar strength, driven by anticipation for this week’s Federal Open Market Committee meeting and Non-Farm Payrolls data. Fed funds futures are currently pricing in less than a 10% chance of a rate cut before November, reflecting the economic resilience noted by policymakers. Historically, the dollar index has rallied an average of 1.2% in the two weeks leading into such hawkishly-perceived meetings.<\/p>\n
This environment is creating a significant headwind for gold, which is struggling to overcome resistance at $3,330 per ounce. The primary pressure comes from rising U.S. 10-year real yields, which climbed back above 2.0% this week, increasing the opportunity cost of holding the non-yielding asset. We would advise against establishing large positions in the metal until after the central bank provides clearer guidance.<\/p>\n
In stark contrast, Ethereum continues to show remarkable strength, breaking through to new year-to-date highs. The 1.6 million ETH accumulated by spot ETFs in recent weeks represents over $6 billion in net inflows, confirming that institutional capital is the primary driver of this rally. The options market reflects this optimism, with the 25-delta risk reversal skew showing a persistent and heavy bias towards call options over puts.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Pound steady amid softening rate cut bets; GBP\/USD tests 1.3300 as USD strengthens ahead of Fed.<\/p>\n","protected":false},"author":62,"featured_media":17030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=27575"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27575\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17030"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=27575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=27575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=27575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}