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GBP/USD remains on the defensive below the mid-1.2600s ahead of US GDP data

  • GBP/USD drops to 1.2638 on the modest rebound in USD, softer UK inflation data.
  • The annual rate of Existing Home Sales climbed to 3.82M in November, better than the 3.77M expected.
  • November’s UK CPI figure climbed 3.9% MoM vs. 4.6% prior, the Core CPI rose 5.1% YoY in November vs. 5.7% previously.
  • The US Q3 Gross Domestic Product (GDP) growth numbers will be a closely watched event.

The GBP/USD pair holds below the mid-1.2600s during the early Asian trading hours on Thursday. The downtick of the pair is backed by the weaker-than-expected UK inflation data and a modest recovery of the US Dollar (USD). At press time, the major pair is trading at 1.2638, up 0.08% on the day.

US consumers were more optimistic about the US economy in December. The US CB Consumer Confidence rose to 110.7 versus 101.0 prior (revised down from 102.0). Additionally, the annual rate of Existing Home Sales arrived at 3.82M in November, above the market consensus of 3.77M.

The Federal Reserve (Fed) showed a dovish tone after the interest rate decision meeting last week and 75 basis points (bps) of rate cuts are expected in 2024 due to the cooling inflationary pressure. However, traders will take more cues from the economic data this week, including the US GDP growth numbers for the third quarter and the Core PCE Price Index, the Fed's preferred gauge of inflation. The softer-than-estimated data could drag the Greenback lower against the British Pound (GBP).

On the UK docket, the nation’s Consumer Price Index (CPI) came in worse than market expectations, dropping 0.2% MoM in November from 0% in the previous reading and below the 0.1% estimated. On an annual basis, the CPI figure climbed 3.9% versus 4.6% prior, missing the expectation of 4.4%. Finally, the Core CPI, which excludes volatile food and energy prices, rose 5.1% YoY in November from 5.7% in October, below the market consensus of 5.6%. The downbeat UK inflation data exerts some selling pressure on the GBP and acts as a headwind for the GBP/USD pair.

Moving on, the UK will release Public Borrowing data for November. Also, the Q3 Gross Domestic Product (GDP), weekly Initial Jobless Claims, and the Philly Fed Manufacturing Survey will be due later on Thursday.

GBP/USD

Overview
Today last price1.2644
Today Daily Change0.0017
Today Daily Change %0.13
Today daily open1.2627
 
Trends
Daily SMA201.2631
Daily SMA501.2411
Daily SMA1001.2449
Daily SMA2001.2511
 
Levels
Previous Daily High1.2735
Previous Daily Low1.2626
Previous Weekly High1.2794
Previous Weekly Low1.2501
Previous Monthly High1.2733
Previous Monthly Low1.2096
Daily Fibonacci 38.2%1.2668
Daily Fibonacci 61.8%1.2693
Daily Pivot Point S11.259
Daily Pivot Point S21.2554
Daily Pivot Point S31.2482
Daily Pivot Point R11.2699
Daily Pivot Point R21.2771
Daily Pivot Point R31.2807

Author

Lallalit Srijandorn

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.

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