GBP/USD remains on backfoot below 1.2570, UK GDP data looms


  • GBP/USD remains on the defensive around 1.2550 in Friday’s early Asian session. 
  • The US Producer Price Index (PPI) increased by 2.1% YoY in March, missing the estimation of 2.2%.
  • BoE’s Greene said the rate cuts in the UK should remain "a way off" amid the persistence of inflation pressure. 

The GBP/USD pair remains on the backfoot near 1.2550 during the early Asian session on Friday. The market expects that the Bank of England (BoE) will cut its interest rate sooner than the US Federal Reserve (Fed) weighs on the Pound Sterling (GBP) and the major pair. Later on Friday, investors will monitor the UK monthly Gross Domestic Product (GDP) for February and the preliminary US Michigan Consumer Sentiment Index for April.

The hotter-than-expected CPI inflation reading this week triggers speculation that the Fed will have to push back the number and timing of interest rate cuts this year. Fed officials believe the US central bank had reached the peak of the current rate-tightening cycle and monetary policy was well positioned to react to the economic outlook, including the possibility of keeping rates higher for longer if inflation declines gradually. The hawkish remarks from the Fed lift the Greenback and drag the GBP/USD pair lower. 

On Thursday, the US Producer Price Index (PPI) data for March increased by 2.1% YoY, missing the estimation of 2.2%. The core PPI, which excludes volatile food and energy prices, rose by 2.4% YoY, compared to the market consensus of 2.3%. 

On the other hand, the hawkish comments from BoE policymaker Megan Greene failed to boost the GBP. Greene stated that the interest rate cuts in the UK should remain "a way off" due to the persistence of inflation pressure, which is still more of a threat than in the US. Greene added that markets were wrong to expect that the BoE to cut rates earlier than the Fed this year. The UK GDP numbers for February might offer some hints about the UK economy. If the report shows stronger-than-expected data, this could provide some support to the GBP and cap the downside of the GBP/USD pair. 

 

GBP/USD

Overview
Today last price 1.2554
Today Daily Change 0.0001
Today Daily Change % 0.01
Today daily open 1.2553
 
Trends
Daily SMA20 1.2644
Daily SMA50 1.2659
Daily SMA100 1.267
Daily SMA200 1.2586
 
Levels
Previous Daily High 1.2579
Previous Daily Low 1.2511
Previous Weekly High 1.2684
Previous Weekly Low 1.2539
Previous Monthly High 1.2894
Previous Monthly Low 1.2575
Daily Fibonacci 38.2% 1.2553
Daily Fibonacci 61.8% 1.2537
Daily Pivot Point S1 1.2516
Daily Pivot Point S2 1.248
Daily Pivot Point S3 1.2448
Daily Pivot Point R1 1.2584
Daily Pivot Point R2 1.2615
Daily Pivot Point R3 1.2652

 

 

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