GBP/USD posts modest gains above 1.2700, investors await US GDP data

GBP/USD clings to mild gains near 1.2717 amid the USD softness.
The UK Flash Purchasing Managers Index (PMI) for January came in stronger than expected.
Former Fed’s Bullard said the central bank may begin cutting interest rates potentially as soon as March.
The flash US Gross Domestic Product (GDP) for Q4 will be in the spotlight on Thursday.

Lallalit Srijandorn FXStreet

The GBP/USD pair posts modest gains during the early Asian trading hours on Thursday. The major pair reclaims above the 1.2700 mark on the back of the risk-on sentiment. Nonetheless, the release of the preliminary US GDP growth numbers for the fourth quarter (Q4) on Thursday might trigger volatility in the market. At press time, GBP/USD is trading at 1.2717, up 0.01% on the day.

On Wednesday, the UK Flash Purchasing Managers Index (PMI) for January came in stronger than expected, with Manufacturing PMI growing from 46.2 to 47.3 while the Services PMI climbed from 53.4 to 53.8. Finally, the S&P Global Composite PMI rose from 52.1 to 52.5, the highest in seven months.

Investors anticipate the Bank of England (BoE) will begin its rate-cutting cycle at its August meeting. The markets have priced in rate cuts by 175 basis points (bps) through the cycle, reaching 4.50% by December 2024.

On the other hand, former St. Louis Federal Reserve (Fed) President James Bullard said on Tuesday that the central bank may begin cutting interest rates potentially as soon as March, even if inflation has not hit the 2% target.

Nonetheless, the US key events this week might convince the Fed about the further monetary policy path. The flash US Gross Domestic Product (GDP) for Q4 will be released later on Thursday. The GDP annualized figure for Q4 is forecast to expand by 2.0% from 4.9% in the previous reading.

Additionally, the US Core Personal Consumption Expenditures Price Index (Core PCE) for December will be due on Friday. The monthly and annual Core PCE figures are expected to show an increase of 0.2% MoM and 3.0% YoY. The figures could give a clear direction to the GBP/USD pair.

GBP/USD

Overview
Today last price	1.2718
Today Daily Change	0.0002
Today Daily Change %	0.02
Today daily open	1.2716

Trends
Daily SMA20	1.2707
Daily SMA50	1.2656
Daily SMA100	1.2457
Daily SMA200	1.2556

Levels
Previous Daily High	1.2775
Previous Daily Low	1.268
Previous Weekly High	1.2766
Previous Weekly Low	1.2597
Previous Monthly High	1.2828
Previous Monthly Low	1.2501
Daily Fibonacci 38.2%	1.2739
Daily Fibonacci 61.8%	1.2716
Daily Pivot Point S1	1.2673
Daily Pivot Point S2	1.2629
Daily Pivot Point S3	1.2578
Daily Pivot Point R1	1.2768
Daily Pivot Point R2	1.2819
Daily Pivot Point R3	1.2863

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD tumbles amid soaring US yields, ahead of jobs data

The Aussie Dollar stumbles over 1% against the US Dollar on Wednesday as US Treasury yields soar, with the US 5- and 10-year T-note yields surpassing the 5% threshold amid investor confidence in further Federal Reserve tightening. The AUD/USD trades at 0.7039 after peaking at 0.7118.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold falls to weekly troughs below $4,300

Gold rapidly leaves behind two daily upticks in a row and comes under heightened downside pressure midweek. Indeed, the precious metal breaches below the $4,300 mark per troy ounce to reach weekly lows amid the marked recovery in the US Dollar and the generalised upbeat tone in the US money market.

Australia unemployment rate expected to remain unchanged at 4.5% in August

Australia will release the August monthly employment report on Thursday at 01:30 GMT. Ahead of the announcement, analysts expect the country to have added 20K new jobs in the month, while the Unemployment Rate is expected to remain steady at 4.5%. The Australian Bureau of Statistics (ABS) report is also expected to show that the Participation Rate stood at 66.9%, unchanged from the previous month.

Freight costs may reach US shelves after the Fed plans to stop hiking

The Federal Reserve has forecast its main reference rate unchanged through 2027, a year when higher shipping costs are likely still reaching US store prices. Shipping a container from Asia to the US costs more than four times what it did before the war with Iran began in late February. International Monetary Fund research puts the peak effect on shop prices roughly a year out, in 2027.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.