GBP/USD Eyes Key US Data, Fed Caution

GBP/USD regained its ground and traded near 1.3460[1] in Thursday’s Asian session. Market commentators[2] point out that the US dollar weakens against the sterling unless traders are waiting more on the Federal Reserve comments. Market observers[3] note that focus has now shifted towards the imminent key US data releases. Durable Goods Orders, final Q2 GDP[4] and Initial Jobless Claims are due. Analysts[5] are of the opinion that such results may affect market mood and define the movement of the Dollar. Analysts[6] believe that the cautious stance of traders before key economic signals is supported by official Federal Reserve (Fed) communications. These reports would highlight traders' caution in awaiting these indicators.

Market commentators[7] point out that traders evaluated the possibility of an easing cycle in the Fed since there were cautious comments. Market reports[8] note that Fed Chair Powell said the Fed must closely balance risks to inflation and employment. He reported that tariffs may affect upcoming monetary policy and data. Market observers[9] note that the policymakers are still very cautious, and it is becoming difficult to support growth and price pressures. Market commentators note that markets now await key US data[10] for clarity on the economic outlook and policy path.

Market reports[11] state that San Francisco Fed, Mary Daly, stated that further reduction might be required this year. She emphasized that the aim is to bring back price stability and favour the labour market. On the contrary, Chicago Fed’s Austan Goolsbee[12] warned of a series of rate cuts. Market commentators[13] point out that markets are currently pricing approximately 43 basis points of pre-year-end cuts. Analysts[14] anticipate that decisions made by policymakers will continue to be based on inflation and labour data set to be released beforehand.

Market commentators[15] point out that the increasing fiscal concerns in Britain escalated following the increase in the surge of public borrowing beyond forecasts. Recent statistics indicated that borrowing was at its peak of £18 billion in the month of September in five years. Market reports state that economists had anticipated a lower result of between 12.8 billion, therefore indicating a significant underperformance. In concurrence with this, there was a chain of gloomy UK economic publications[16] that put pressure. Analysts[17] suspect that these factors will put pressure on the Pound. The Cable would be subjected to further downside risks in the near future.

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EUR/USD Holds Steady Amid German Data Concerns

EUR/USD stayed steady near 1.1750[18] in Thursday's Asian session after sharp losses. The pair[19] is believed to recover marginally after a fall of more than 0.5%. Market commentators[20] point out that traders observe the upcoming German GfK Consumer Confidence Survey as a key market indicator of German consumer behaviour and economic outlook. The market sentiment is still on the run, and the short-term movement is based on the European data[21] releases.

It is believed that the Euro weakened after Germany’s IFO Business Climate Index[22] dropped to 87.7. This missed expectations of 89.3 and slipped from 89.0 recorded in August. Market commentators[23] point that despite the data, EUR/USD held steady while the US Dollar remained softer. Traders await comments from Fed officials[24] later in the trading day. Markets now turn focus toward Friday’s PCE Price Index[25], the Fed’s inflation gauge.

Market reports[26] point out that the US dollar rose following a cautious message given by Fed Chair Jerome Powell. He claimed that the central bank is dealing with recalcitrant inflation but also a deteriorating job market. Powell states that the policy position of the Fed presented a difficult scenario to the decision makers. Market commentators[27] note that even with this, markets are hoping that policymakers will ease rates. The CME FedWatch tool[28] indicates a probability of 92% of a rate cut in October, up by 87%.

Market reports[29] point out that San Francisco Fed President Mary Daly said that further rate cuts might be necessary. She emphasized these actions to bring back the price stability and to rejuvenate the labour market. The Chicago Fed, Austan Goolsbee[30], went against the expectations of successive rate cuts in the current year. His remarks outline the differences among the Fed officials regarding the monetary policy. The difference also increased with the new nominee in Fed, Stephen Miran[31], who indicated different considerations.

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NZD/USD Subdued as Dollar Strength Persists

NZD/USD subdued and traded near 0.5815[32] in Thursday's early Asian session. The Dollar is believed to be strong following the conservative policy easing by Fed Chair Powell[33] on Tuesday. Market commentators[34] point out that investors are awaiting the upcoming final US Gross Domestic Product final Q2. The market focus is based on the growth data[35] to inform Dollar sentiment and direction. Traders are still at alert as they closely monitor signs of the economy[36] by the Fed. Kiwi may be largely dependent on US GDP[37] release to move.

Market reports[38] note that Fed Chair Powell sounded a cautious tone on Tuesday, emphasizing that there was a need to balance pressure of inflation with indications of a weak labour market. Traders[39] have at last projected a 25 basis point reduction at all the remaining Fed meetings this year and another in early 2026. It is believed that the cautious stance of Powell[40] favours the US dollar, restricting appreciation in the pair and chaining on the overall market attitude.

Market reports[41] point out that New Zealand’s Finance Minister Willis has appointed Anna Breman as the Governor of the Reserve Bank of New Zealand (RBNZ). She will have a five-year term in office in December. The confirmation on Wednesday indicated continuity at the Reserve Bank. Breman manages to play a key leadership role in the monetary policy and stability.

Analysts[42] believe that the markets expect the RBNZ to go on a rampage before the new governor comes into power. The expectation undermines the Kiwi against the US dollar, further stressing it. Market reports[43] swaps data indicate growing bets on a significant 50 bps rate cut next month. The traders have a great possibility of major action in the meeting next month. Market observers[44] note that the outlook presents the fears of growth and inflation leading to more decisive policy actions. This keeps the New Zealand dollar subject to distinct downside risk.

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USD/CAD Pauses as Investors Await US Data

USD/CAD paused its three-day rally to trade near 1.3890[45] in Thursday's Asian trading hours. The pair is believed to soften, with the US dollar[46] fading away, following steep gains on Wednesday. Market commentators note that traders are awaiting the release of the US Q2 Annualised GDP[47]. The focus will then shift to the PCE Price Index[48] inflation information on Friday. PCE numbers being the preferred indicator of Fed could affect interest rate projections. Investors are wary as they await new guidance on the key US data.

The US dollar is believed to have gained power after a Fed Chair Jerome Powell[49] adopted a cautious tone. He cautioned the central bank of impeding inflation and deteriorating labour market. Powell referred to the situation at Fed as a challenging one like he said last week. Markets[50] are however anticipating a change in policy. The fresh data, as reflected in the CME FedWatch tool[51], pegs the probability of a 92% cut in the rate in October, as opposed to 87% earlier.

Market reports[52] point out that San Francisco Fed President Mary Daly, indicated that the rate cuts could continue. She emphasised the necessity to re-establish price level and to help in the labour market. Chicago Fed President Austan Goolsbee went contrary to the expectations of continuing the cuts this year. His position increased the difference with the latest Fed nominee, Stephen Miran, made by Donald Trump. Market commentators[53] believe that the mixed position puts doubt on the direction of the central bank's policy. Fed signals in conflicting policy views keep markets vigilant.

Market reports[54] point out that Bank of Canada (BoC) Governor Tiff Macklem encouraged Canada to forge a more independent course. He cited the weak US Dollar and emphasized the possible world financial risks. Macklem observed that the changing trade and capital flows might create systemic pressures and that Canada must build economic resilience separately.

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