GBP/USD holds above the 1.2700 mark ahead of the US GDP data
|- GBP/USD strengthens to 1.2715 amid the USD weakness.
- BoE’s Haskel said the inflationary pressures remain in the UK labour market and there was no way to cut rates any time soon.
- US CB Consumer Confidence climbed to 102.00 in November, vs. a downward revision to 99.1 prior.
- Traders will closely watch the US growth numbers, due later on Wednesday.
The GBP/USD pair gains momentum above 1.2700 during the early European session on Wednesday. The uptick of the pair is supported by the weaker US Dollar (USD) and lower US Treasury bond yields. The pair currently trades near 1.2715, up 0.19% on the day.
The Bank of England (BoE) governor, Jonathan Haskel said inflationary pressures remain in the UK labor market and there was no way to cut interest rates from their 15-year high any time soon. While BoE Deputy Governor Dave Ramsden said monetary policy would need to be restrictive for some time to bring inflation down. On Monday, BoE Governor Andrew Bailey said getting inflation down to the central bank's 2% target will be hard work as most of its recent decline was caused by the unwinding of the surge in energy prices last year. Nonetheless, the BoE's latest forecasts show it estimates inflation to return to 2% at the end of 2025.
Federal Reserve (Fed) Governor Christopher Waller said Tuesday that inflation currently remains too high, but he stated that progress has been made and the Fed won’t need to hike rates further from here. That being said, the rising odds that the Fed is done with rate hiking weigh on the USD and act as a tailwind for the GBP/USD pair.
Apart from this, data on Tuesday showed that US CB Consumer Confidence climbed to 102.00 in November, compared to a downward revision to 99.1 prior. The Richmond Fed Manufacturing declined to 5.0 from 3.0 rise in the previous reading. The S&P/Case-Shiller Home Price Index rose 3.9% YoY in September, below the estimation of 4.0%.
Market participants will keep an eye on the US Gross Domestic Product Annualized for the third quarter (Q3), due later on Wednesday. The growth rate is expected to expand by 5.0%. Also, BoE's Governor Bailey is set to speak later in the day. Traders will take cues from these data and find trading opportunities around the GBP/USD pair.
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