GBP/USD consolidates around mid-1.3000s, seems vulnerable ahead of UK data

GBP/USD draws support from subdued USD demand, though bulls remain on the sidelines.
Expectations for more aggressive BoE policy easing undermine the GBP and cap the major.
Traders now look to the UK data dump for short-term impetus ahead of the US PPI report.

Haresh Menghani FXStreet

The GBP/USD pair struggles to capitalize on the previous day's modest bounce from the 1.3020 area or a one-month low and oscillates in a narrow band during the Asian session on Friday. Spot prices currently hover around mid-1.3000s, unchanged for the day, and seem vulnerable to prolonging the recent retracement slide from the highest level since March 2022 touched last month.

The US Initial Jobless Claims data released on Thursday pointed to signs of weakness in the US labor market and suggested that the Federal Reserve (Fed) will continue cutting interest rates. This keeps the US Dollar (USD) on the defensive below its highest level since mid-August and lends some support to the GBP/USD pair. That said, investors now seem to have fully priced out the possibility of a more aggressive policy easing by the Fed. The expectations were reaffirmed by the September FOMC meeting minutes and the stronger-than-expected US consumer inflation figures.

Apart from this, persistent geopolitical risks stemming from the ongoing conflicts in the Middle East act as a tailwind for the safe-haven Greenback and cap the upside for the GBP/USD pair. In the latest development, Israel's army said that it has killed the top commander of the Palestinian militant group Islamic Jihad in the Nur Shams refugee camp in the occupied West Bank. This, along with the market conviction that the Bank of England (BoE) might be heading towards speeding up its rate-cutting cycle, might continue to undermine the British Pound and keep a lid on the currency pair.

Market participants now look forward to the UK macro data dump, including the monthly GDP print, for some impetus. The focus, however, will remain on the US Producer Price Index (PPI), due later during the North American session. Apart from this, the US economic docket features the release of the Preliminary Michigan Consumer Sentiment Index and Inflation Expectations. This, along with speeches by influential FOMC members, will drive the USD demand and allow traders to grab short-term opportunities around the GBP/USD pair on the last day of the week.

Economic Indicator

Gross Domestic Product (MoM)

The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

AUD/USD eyes 0.7150 barrier nine-day EMA

AUD/USD inches higher after registering modest losses in the previous day, trading around 0.7130 during the Asian hours. The technical analysis of the daily chart indicates that the pair is moving sideways within the rectangle pattern, suggesting a consolidation as neither the bulls nor the bears have enough momentum to take control of the market.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold extends rebound to $4,500 as US yields edge lower

Gold (XAU/USD) preserves its recovery momentum following Wednesday's slide and tests the $4,500 mark in the second half of the day on Thursday. While US-Iran uncertainty remains, easing tensions between Lebanon on Israel seems to be helping the market mood improve, causing the USD to lose strength alongside falling US T-bond yields and opening the door for a decisive rebound in XAU/USD.

Hyperliquid: ETF demand, capital rotation fuel HYPE rally as Bitcoin melts

Hyperliquid price sustains an upward trend near its all-time high of $75.76 on Thursday after posting 80% gains in May, while Bitcoin (BTC) retraces below $65,000, triggering a market-wide panic.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.