|

GBP/USD hovers around 1.2200 post recent losses on upbeat US data

  • GBP/USD recovers from losses registered after optimistic US economic readings.
  • US headline inflation surpassed the expectations; while jobless claims printed a lower reading than expected.
  • The recent downbeat UK data might have put pressure on the Pound Sterling.

GBP/USD retraces the recent losses that were registered on Thursday, trading higher around the 1.2200 psychological level. However, the pair faced challenges due to the optimistic economic data from the United States (US).

The Consumer Price Index (CPI) in the US, as revealed by the US Bureau of Labor Statistics (BLS), exceeded expectations in September, with annual figures expanding consistently at a rate of 3.7%, slightly surpassing the estimated 3.6%.

Furthermore, the Initial Jobless Claims for the week ending on October 6 exhibited a nuanced trend. Despite a modest increase of 209K, the figure was slightly below the forecast of 210K, indicating a subtle easing.

On Thursday, the data showed that the US Producer Price Index (PPI) surged in September on a yearly basis, jumping from 2.0% to 2.2%, Core PPI climbed to 2.7% from the anticipated easing to 2.3%.

Discussions are stirred about the trajectory of the Federal Reserve's (Fed) monetary policy following the slew of upbeat economic data during this week.

Additionally, UK economic data failed to instill confidence in the Pound Sterling (GBP) on Thursday. The Manufacturing and Industrial Production figures fell short of expectations, with Manufacturing Production declining by 0.8% in August, missing the forecast of 0.4% decline, swinging from the previous month's dip of 1.2%.

Industrial Production for the same period missed estimates, registering a decline of 0.7% instead of the anticipated 0.2% decline. The prior reading was revised at a 1.1%  decline. Although UK Gross Domestic Product (GDP) for August met expectations at 0.2%, the previous month was revised to 0.6% decline. It's a mixed bag of economic indicators, that failed to impact the sentiment around the British Pound.

During the previous week, the Bank of England (BoE) revised its growth forecast for the July-September period from 0.4% to a mere 0.1%, providing little indication of any inclination to pursue further rate increases.

Market participants will likely monitor the US Michigan Consumer Sentiment Index and BoE's Governor Andrew Bailey’s speech on Friday for further indications on economic scenarios in both countries.

GBP/USD: additional levels to watch

Overview
Today last price1.22
Today Daily Change0.0025
Today Daily Change %0.21
Today daily open1.2175
 
Trends
Daily SMA201.2234
Daily SMA501.2476
Daily SMA1001.2602
Daily SMA2001.2444
 
Levels
Previous Daily High1.2332
Previous Daily Low1.2172
Previous Weekly High1.2262
Previous Weekly Low1.2037
Previous Monthly High1.2713
Previous Monthly Low1.2111
Daily Fibonacci 38.2%1.2233
Daily Fibonacci 61.8%1.2271
Daily Pivot Point S11.2121
Daily Pivot Point S21.2066
Daily Pivot Point S31.1961
Daily Pivot Point R11.2281
Daily Pivot Point R21.2386
Daily Pivot Point R31.2441

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

More from Akhtar Faruqui
Share:

Editor's Picks

AUD/USD flatlines below 0.7050 as bulls await RBA rate decision on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.



USD/JPY advances to 157.75 as BoJ uncertainty weighs on the JPY

USD/JPY regains positive traction during the Asians session on Monday, building on Friday's bounce from sub-157.00 levels as the uncertainty over the timing of the next BoJ rate hike undermines the Japanese Yen. Meanwhile, hopes for Middle East diplomacy cap the safe-haven US Dollar and the currency pair amid speculation that authorities will step in to support the Japanese Yen.

Gold struggles to build on recovery from one-year low beyond $3,900

Gold kicks off the week on a positive note, recovering slightly from its lowest level since October 2025, touched on Friday, as hopes for Iran diplomacy cap the US Dollar. However, Fed rate-hike bets keep a lid on the non-yielding bullion as focus shifts to key US macro releases scheduled at the start of the new month, including the ISM Manufacturing later today and the NFP report on Friday.


Week ahead: Nonfarm Payrolls and US midterm elections take center stage
The US dollar traded higher against most of its peers this week, beginning the week on a solid footing amid expectations of a hawkish FOMC decision on Wednesday. Although market participants were convinced that a rate hike was off the table, they were on the lookout for clues and hints on whether they were correct in nearly fully pricing in a 25bps rate hike in December.
Middle East War updates: Iran warns of expanded strikes against US despite progress in talks

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

The 2% inflation target came from a throwaway remark. It now moves trillions
The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.