GBP/USD posts modest gains above 1.2500, UK GDP data eyed


  • GBP/USD trades with a mild positive bias around 1.2525 amid the weaker USD on Friday. 
  • The BoE kept rates unchanged at 5.25% and opened the door to a rate cut sooner than expected.
  • Fed’s Daly said it’s difficult to make projections for policy until the central bank gets more clarity.

The GBP/USD pair posts modest gains near 1.2525 during the early Asian session on Friday. The major pair bounces off the lows of 1.2445 after the Bank of England (BoE)’s dovish hold. The attention on Friday will shift to the first reading of the UK Gross Domestic Product (GDP) for Q1 and the US Michigan Consumer Sentiment report. 

The BoE kept its borrowing costs on hold at 5.25% for the sixth meeting in a row on Thursday and signaled that it could begin cutting interest rates as early as next month as inflation is “moving in the right direction.”  The BoE Governor Andrew Bailey stated during the press conference that “a rate cut next month was a possibility.”, but he will wait for inflation, activity, and labor market data before making the decision. The dovish stance from the UK central bank that opened the door to future cuts in interest rates exerted some pressure on the Pound Sterling (GBP) following the monetary policy meeting.

Meanwhile, BoE Chief Economist Huw Pill said that the central bank was more confident that they would consider rate cuts over the next few meetings, although they needed more evidence. Investors have been pricing in two rate cuts this year, with the first expected in August. 

On the other hand, San Francisco Fed President Mary Daly said late Thursday that uncertainty about the next few months of inflation has increased and it may take “more time” to bring inflation down to the central bank’s target. A cautious approach to setting interest rates implied that the current rates will likely stay at their current levels for longer. The divergence of policy between the BoE and the Fed is likely to weigh the Cable and cap the pair’s upside in the near term. 

GBP/USD

Overview
Today last price 1.2528
Today Daily Change 0.0030
Today Daily Change % 0.24
Today daily open 1.2498
 
Trends
Daily SMA20 1.2482
Daily SMA50 1.2604
Daily SMA100 1.264
Daily SMA200 1.2545
 
Levels
Previous Daily High 1.2516
Previous Daily Low 1.2468
Previous Weekly High 1.2635
Previous Weekly Low 1.2466
Previous Monthly High 1.2709
Previous Monthly Low 1.23
Daily Fibonacci 38.2% 1.2486
Daily Fibonacci 61.8% 1.2497
Daily Pivot Point S1 1.2472
Daily Pivot Point S2 1.2446
Daily Pivot Point S3 1.2424
Daily Pivot Point R1 1.252
Daily Pivot Point R2 1.2542
Daily Pivot Point R3 1.2568

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD extends slide below 1.0700 on stronger USD, EU political angst

EUR/USD extends slide below 1.0700 on stronger USD, EU political angst

EUR/USD stays under bearish pressure and trades at its lowest level since early May below 1.0700. Unabated US Dollar demand amid risk aversion and looming EU political uncertainty exert downside pressure on the pair heading into the weekend.

EUR/USD News

GBP/USD slumps to multi-week lows below 1.2700

GBP/USD slumps to multi-week lows below 1.2700

GBP/USD extends its decline on Friday and trades at its lowest level in nearly a month below 1.2700. In the absence of high-tier data releases, the US Dollar continues to benefit from souring market mood, forcing the pair to stretch lower in the second half of the day.

GBP/USD News

Gold clings to recovery gains at around $2,330

Gold clings to recovery gains at around $2,330

Following Thursday's pullback, Gold holds its ground on Friday and trades in positive territory near $2,330. The benchmark 10-year US Treasury bond yield edges lower toward 4.2%, helping XAU/USD push higher ahead of the weekend.

Gold News

Monero price poised for a downward correction

Monero price poised for a downward correction

Monero price has encountered resistance at a critical level. The technical outlook suggests a potential short-term correction as momentum indicators signal a bearish divergence.

Read more

Week ahead – RBA, SNB and BoE next to decide, CPI and PMI data also on tap

Week ahead – RBA, SNB and BoE next to decide, CPI and PMI data also on tap

It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.

Read more

Forex MAJORS

Cryptocurrencies

Signatures