Bias: bullish-to-range-bound, as the USD is above the 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The Federal Reserve's potential rate cuts may keep USD demand steady, while the Bank of England has signaled only cautious approaches to further cuts.
• Risk/commodities: Recent fluctuations in oil prices and geopolitical tensions have impacted the USD's appeal, potentially solidifying its strength against the GBP.
• Economic growth: The UK’s GDP growth is expected to slow significantly, which could weigh on the pound.
Range: The USD/GBP pair is likely to hold steady within its recent range, given its current stability just below the average.
What could change it:
• Upside risk: Stronger-than-expected US job data could boost USD further.
• Downside risk: A dovish tone from the Fed could weaken the USD, leading to a GBP recovery.