GBP/USD retreats from YTD high as Fed holds rates steady signals further tightening

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GBP/USD retreats from YTD high as Fed holds rates steady signals further tightening
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GBP/USD retreats from YTD high as Fed holds rates steady signals further tightening GBPUSD Currencies Majors Fed InterestRate

Dot-plot reveals officials’ expectations for the Federal Funds Rate to reach 5.6% by the year’s end, hinting at further tightening.”

Fed forecasts bolstered growth at 1% in 2023 and a lower unemployment rate but anticipates elevated inflation with Core PCE estimated at 3.9%. held rates unchanged, in a buy-the-rumor, sell-the-fact reaction, as the GBP/USD is set to erase some of its earlier gains, which saw the GBP/USD reaching a new year-to-date high at 1.2698. At the time of writing, the GBP/USD is trading volatile at around the 1.2690/1.2640 area as traders brace for Jerome Powell’s press conference.

Federal Reserve officials projected growth at 1% in 2023, up from 0.4% in March, and the Unemployment rate was downward revised from 4.5% to 4.1%. The Fed’s preferred gauge for inflation, the Core PCE, is estimated at 3.9% compared to March 3.6%, while general PCE is estimated at 3.2% from 3.3%.The GBP/USD edged from 1.2680 and cracked the R1 daily pivot, as it hit 1.2626, before stabilizing around the current exchange rate at around 1.2640.

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