#GBPUSD @ 1.20521 The Pound Sterling jumped above 1.2000 as the Federal Reserve Chair, Jerome Powell, took the stance.

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• The Pound Sterling jumped above 1.2000 as the Federal Reserve Chair, Jerome Powell, took the stance.
• Fed’s Powell: “Makes sense to moderate pace of interest rate hikes.”
• Fed’s Powell opened the door for a 50bps rate hike in the December meeting.

The British Pound (GBP) is trading negatively in the day, failing to capitalize on dovish remarks by the Federal Reserve Chair Jerome Powell, which opened the door for a 50 bps rate hike at the December meeting, albeit reiterating that work needs to be done. At the time of writing, the GBP/USD is trading volatile, around 1.1930-1.2050, as Powell begins to answer questions.

In his speech, the Federal Reserve Chair said that it made “sense” to slow the speed of rate hikes, stating that it could happen at the December meeting. Powell added that the Fed has made substantial progress towards a “sufficiently restrictive policy,” though he said there’s “more ground to cover.”

Powell added that rates would get higher than projected in September and remain restrictive for “some time.” HE echoed some of his colleague’s comments adding that inflation is “far too high” and needs more evidence that inflation is actually “declining.”

Also read: Breaking: Fed chair Powell speech sends US Dollar lower

Following the Fed Chair Powell speech, money market futures odds for a 50 bps rate hike lie at 75%, while there is a 25% chance of 75. Meanwhile, swaps futures expect the Federal Funds rate(FFR) to peak under 5% by May 2023.

The GBP/USD jumped from around 1.1925 towards 1.2011. Once he finished the speech, the GBP/USD retreated to 1.1970 before beginning its Q&A session, which rocked the boat, undermining the US Dollar and bolstering the Pound Sterling, as the GBP/USD hit the daily high of 1.2050.

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