- 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. 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
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.