GBP/USD holds positive ground above the 1.2600 mark, investors await Fed, BoE policymakers' speech
- GBP/USD snaps the two-day losing streak near 1.2605 on the weaker USD.
- The UK Retail Sales remained flat in February, better than the estimation of a 0.3% decline.
- The rising speculation the Fed would start cutting rates in June might cap the upside of the Greenback.
The GBP/USD pair holds positive ground above the 1.2600 psychological support during the early European session on Monday. The major pair rebounds amid the softer US Dollar (USD) and lower US Treasury bond yields. Investors await the release of Gross Domestic Product (GDP) from the UK and US on Thursday for fresh catalysts. At the press time, GBP/USD is trading at 1.2605, adding 0.03% on the day.
Data released from the Office for National Statistics on Friday reported that UK Retail Sales came in better than expectations, remaining flat in February. This figure was above the market consensus of a 0.3% decline and suggested a good sign for the economy since the UK entered a technical recession after two consecutive quarters of economic contraction in the second half of last year. Market participants will take more cues from UK GDP growth numbers on Thursday, which is estimated to contract 0.3% QoQ and 0.2% YoY in the fourth quarter. The stronger-than-expected data might boost the Pound Sterling (GBP) and act as a tailwind for the GBP/USD pair.
On the other hand, the renewed bets that the Federal Reserve (Fed) would start cutting the interest rate in June might cap the upside of the Greenback. The Fed Chairman Jerome Powell reiterated last week that policymakers plan to cut rates before the end of this year, given that economic growth continues. According to CME Group's FedWatch tool, Federal Funds Futures have priced in 74.5% odds that the Fed will cut rates in the June meeting.
Market players will watch the Chicago Fed National Activity Index and US New Home Sales for February on Monday. Additionally, Fed’s Raphael Bostic and BoE’s Catherine Mann are set to speak later in the day. On Thursday, the UK and US Gross Domestic Product (GDP) growth numbers reports will be in the spotlight. These events could give a clear direction to the GBP/USD pair.