GBP/USD picks demand around 1.2200 as risk appetite improves further
|- GBP/USD has displayed recovery after correcting to near 1.2200 as a risk-on impulse has strengthened further.
- Fed Harker doesn’t see any recession but GDP could slow to 1% in CY2023.
- UK’s annual Industrial and Manufacturing Production (Nov) are expected to contract by 3.0% and 4.8% respectively.
The GBP/USD pair has rebounded after a corrective move to near the round-level support at 1.2200 in the early Toyo session. The Cable has resumed its upside journey as the risk appetite of the market participants has improved further.
After three consecutive bullish trading sessions, the S&P500 futures are extending gains, portraying a cheerful market mood. Also the demand for US government bonds has improved as 10-year US Treasury yields have eased further to near 3.44%. The US Dollar Index (DXY) has turned sideways after refreshing its seven-week low at 101.68.
Investors dumped the USD Index after further softening of the United States inflation, released on Thursday. The annual headline US Consumer Price Index (CPI) dropped to % while the core CPI that excludes oil and food prices was trimmed to 5.7%, in line with expectations. A spree of inflation softening indicates that the long-term blueprint designed by the Federal Reserve (Fed) chair Jerome Powell and his teammates for achieving price stability is in the right direction.
No doubt, Fed policymakers have started considering further deceleration in the pace of the interest rate hike already after slowing in December’s monetary policy meeting. Philadelphia Fed Bank President Patrick Harker said on Thursday that it was time for future Fed rate hikes to shift to 25 basis points (bps) increments, as reported by Reuters. He further added that recession is not in the picture but the Gross Domestic Product (GDP) could slow to 1% this year.
On the United Kingdom front, investors are awaiting the release of the economic activities-related data, which will result in a power-pack action in the Pound Sterling. Annual Industrial and Manufacturing Production (Nov) are expected to contract by 3.0% and 4.8% respectively.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.