GBP/USD: The Pound Sterling ebbs below 1.1600 as the US GDP rises

The GBP/USD dropped from around 1.1600 after hitting six-week highs at 1.1645 due to overall US Dollar strength spurred by upbeat US data showing the economy’s resilience, despite the ongoing tightening of monetary conditions by the Federal Reserve. Also, the ECB’s monetary policy decisions were a tailwind for the US Dollar and weighed on the Pound Sterling. The GBP/USD is trading at 1.1581, below its opening price by 0.36 percent.

The US Dollar got a boost from US economic data

A risk-on impulse was no excuse for the US Dollar to appreciate against the Sterling. The US Bureau of Economic Analysis (BEA) revealed the growth figures for the third quarter, showing that the economy is growing at a faster rate than estimated, at 2.6%, vs. 2.4%, foreseen by a Reuters poll. Additionally, the US Department of Labor revealed that Unemployment claims for the week ending on October 22 rose by 217K, less than estimates of 220K, though more than the previous week, flashing that the labor market is easing.

Nevertheless, the fall in Durable Good orders increasing by just 0.4% MoM, less than the 0.6% increase estimated for September, disappointed market participants. Excluding transportation, new orders shrank b 0.5%, below the previous month’s reading.

Following the release of US economic data and the European Central Bank (ECB) policy decision, the GBP/]USD resumed its slide below 1.1600. Nevertheless, the appointment of the UK’s new Primer Minister, Rishi Sunak, stalled the downfall and kept the pair’s weekly gains at around 2.50%.

What to watch

The US economic docket will feature the US Federal Reserve’s favorite inflation gauge, the Core PCE, estimated at 0.5% MoM and 6.3% YoY, alongside the Consumer Sentiment and Pending Home Sales.

GBP/USD Key Technical Levels