GBP/USD Breaks Lower: Fed, BoE Hawkish Signals Could Present Short Opportunities

investing.com:

Starting in June, new banknotes featuring the new Monarch Charles III will be introduced in the UK alongside the existing ones.

This change might be important for everyday English people who use pounds on a daily basis, but the Bank of England and the Fed's upcoming decisions would be crucial for the country as a whole.

The UK banking authorities might choose to continue with a hawkish monetary policy, sending the pound sterling higher.

Therefore, the Bank of England and Federal Reserve's respective meetings this week could heavily influence the GBP/USD trend for the year ahead.

In his February speech, Bank of England Governor Andrew Bailey suggested the likelihood of keeping interest rates high for a longer duration.

This indicates that the European Central Bank and the Federal Reserve might do so first, prompting the Bank of England to follow suit.

On the macroeconomic front, inflation has noticeably decreased in recent months but still hovers above the 4% threshold.

On Wednesday, we expect new data to come out before the Bank of England's meeting on Thursday.

If the data shows inflation higher than expected, it could lead to a more aggressive approach from the Bank of England. Any decision to change interest rates would be a surprise.

What will be interesting to see is how each member of the board votes.

Similarly, the Federal Reserve is also unlikely to make any changes at its upcoming meeting on Wednesday. Recent data hasn't provided enough clarity for the Fed to decide on future actions.

The announcement will likely be neutral, emphasizing the need to monitor further data from the US economy.

Given the lesser chances of recession, the Federal Reserve isn't under pressure to make any sudden moves.

Currently, the