The Pound Sterling (GBP) gains to near 1.2975 against the US Dollar (USD) in Monday's London session. The GBP/USD pair rises as the US Dollar falls back, with investors focusing on a slew of United States (US) economic data this week.
The US Dollar Index (USD), which gauges Greenback's value against six major currencies, revisits an almost three-month high at around 104.60 on Monday.
Investors will pay close attention to the US preliminary Q3 Gross Domestic Product (GDP) and the Nonfarm Payrolls (NFP) data for October, which will exhibit the current status of economic growth and labor demand, respectively. The economic data will significantly influence market speculation regarding the Federal Reserve (Fed) interest rate outlook for the remaining year.
The Fed started its policy-easing cycle with a larger-than-usual interest rate cut of 50 basis points (bps) in September as officials were worried about growing economic risks, with confidence over inflationary pressures remaining on track to the bank's target of 2%.
For the remainder of the year, traders see the central bank reducing interest rates by 25 basis points (bps in November and December, according to the CME FedWatch tool.
Meanwhile, the uncertainty over the US presidential election will continue to support the US Dollar. In meetings at the week-long International Monetary Fund (IMF) event last week, financial experts vividly discussed the outcome of the US elections and possible consequences. As former President Donald Trump has vowed to raise tariffs on all nations, central bankers are worried that it could ramp up costs associated with global supply chain mechanism if he wins against current Vice President Kamala Harris.
Source: FXstreet
