GBP/USD drifts higher to 1.2630 on weaker USD, UK higher house prices

The GBP/USD pair gains traction during the early Asian session on Thursday. The uptick in the major pair is bolstered by rising house prices in the UK, which supported bets that the Bank of England (BoE) was not likely to cut interest rates any time soon. The BoE Catherine L. Mann is set to speak on Thursday. At press time, GBP/USD is trading at 1.2630, gaining 0.05% on the day. 

Earlier this week, Fed Chair Jerome Powell stated that March is too early to start rate cuts and investors continue to pencil in the first rate cut in June. Four Fed Governor, Adriana Kugler, Boston Fed President Susan Collins, Minneapolis Fed President Neel Kashkari, and Richmond’s Thomas Barkin were all noncommittal on when the US central bank can start cutting the benchmark lending rate from a two-decade high. However, Minneapolis Fed President Kashkari said that the US central bank needs more time to gain confidence in the inflation outlook before beginning to cut rates.

On Wednesday, the UK Halifax House Prices for January rose 2.5% in the year to January, the strongest annual growth rate for a year. The BoE Deputy Governor Sarah Breeden said on Wednesday that the UK central bank is in no rush to cut interest rates. Breeden further stated that she was now thinking about how long interest rates would need to stay at their current level instead of whether they would need to rise further. Money markets have priced in a 61% odds of a BoE rate cut in June. 

Market players will keep an eye on the US weekly Initial Jobless Claims, and Wholesale Inventories. Additionally, the speeches by the Fed’s Barkin (Richmond) and the BoE’s Mann will be monitored by traders. Traders will take more cues from these events and find trading opportunities around the GBP/USD pair.