- GBP/USD trades strongly for the third consecutive day on Friday.
- The BOE may be forced to provide the timeline of its first rate cut as inflation might decline faster than expected.
- The US CPI inflation reports may challenge the plans of the Federal Reserve (Fed) to cut the interest rate this year.
- Traders will monitor the monthly GDP growth numbers for November and the US Producer Price Index (PPI).
The GBP/USD pair gains ground to nearly the weekly high during the early Asian trading hours on Friday. The November UK Gross Domestic Product (GDP) is estimated to grow by 0.2% MoM from the 0.3% contraction in the previous reading. GBP/USD currently trades near 1.2780, gaining 0.16% on the day.
The Bank of England (BOE) Governor Andrew Bailey had forecast a tough battle lay ahead to bring inflation back to its 2% target while pushing back against speculation about cutting rates. Nonetheless, a decline in energy prices might bring inflation down at a faster rate than the BOE expected. The UK central bank may be forced to provide the timeline of its first interest rate cut after three leading forecasters issued a surprise update suggesting the inflation rate will halve to 2% by April.
On the USD’s front, the recent US inflation reports may challenge the plans of the Federal Reserve (Fed) to cut the interest rate this year. The US Bureau of Labor Statistics showed on Thursday that the US Consumer Price Index (CPI) increased more than estimated in December, as the CPI rose 3.4% YoY from the 3.1% increase seen the month prior. The Core CPI figure, which excludes volatile food and energy prices, grew 3.9% YoY in December, above the market consensus of 3.8%.
Looking ahead, market participants will keep an eye on the UK Manufacturing Production, Industrial Production, and monthly Gross Domestic Product for November. On the US docket, the Producer Price Index (PPI) for December will be due, and Fed’s Neel Kashkari is set to speak.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
NZD/USD buyers test 0.6100 ahead of RBNZ rate decision
NZD/USD is on the bids, testing 0.6100 in the Asian session, awaiting the RBNZ interest rate decision. The RBNZ is expected to keep interest rates steady but Governor Orr's comments will be closely scrutinized for the path forward on rates.
AUD/USD keeps range below 0.6700 amid cautious markets
AUD/USD keeps its range trade intact in Asian trading on Wednesday, consolidating the previous drop below 0.6700. Markets turn cautious ahead of the Fed Minutes and Nvidia earnings report, leaving the higher-yielding Aussie on the edge.
Gold price clings to mild losses ahead of FOMC Minutes
Gold price trades on a negative note on Wednesday after retreating from a record high on Monday. Members of the Federal Reserve warned that the US central bank needed much more convincing that inflation was easing before it could begin cutting interest rates, emphasizing the Fed is likely to keep rates higher for longer.
DeFi and Layer 2 coins rally following Ethereum's rise
Ethereum ecosystem tokens have surged following ETH's recent rally after optimism that the Securities & Exchange Commission would approve spot ETH ETFs.
Ready for NVDA
S&P 500 saw upswing rejected, making it remain in a tight range – but the sellers aren‘t in control. Nasdaq had one of its days of outperformance, with select names sending signals as to what to expect from NVDA earnings, already now.