- GBPUSD gains some positive traction on Friday amid subdued USD price action.
- A combination of factors limits the USD downside and keeps a lid on the major.
- A bleak outlook for the UK economy contributes to capping the British Pound.
The GBPUSD pair sticks to its modest intraday gains through the early European session and is currently placed around the 1.1900 round-figure mark.
As investors look past a rather unimpressive UK government £55 billion fiscal plan, as outlined in the Autumn budget, a combination of factors assists the GBPUSD pair to regain positive traction on the last day of the week. Expectations that the Bank of England will continue raising rates to combat stubbornly high inflation act as a tailwind for the British Pound. Apart from this, the better-than-expected monthly UK Retail Sales data offers some support to spot prices amid subdued US Dollar price action.
The downside for the USD, however, remains cushioned amid the prevalent cautious mood. Concerns about economic headwinds stemming from a new COVID-19 outbreak in China, along with geopolitical tensions, continue to weigh on investors' sentiment. Apart from this, the overnight hawkish remarks by St. Louis Fed President James Bullard, saying that the policy is not yet in a range estimated to be sufficiently restrictive to reduce inflation, favour the USD bulls.
Apart from this, the gloomy outlook for the UK economy suggests that the path of least resistance for the GBPUSD pair is to the downside. In fact, the UK Office for Budget Responsibility (OBR) expects the UK GDP to slump by 1.4% next year as compared to its projections of growth of 1.8%, in March. Hence, any subsequent intraday positive move might still be seen as a selling opportunity and is likely to remain capped. Traders now look to speeches by external BoE MPC members - Catherine Mann and Jonathan Haskel - and the US Existing Homes Sales data for a fresh impetus.
Technical levels to watch
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
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
![EUR/USD stays in positive territory above 1.0850 after US data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-euro-and-dollar-banknotes-17371247_XtraSmall.jpg)
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
![GBP/USD stabilizes above 1.2850 as risk mood improves](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/strong-pound-weak-dollar-17536259_XtraSmall.jpg)
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
![Gold rebounds above $2,380 as US yields stretch lower](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-gm187363896-28836378_XtraSmall.jpg)
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
![Avalanche price sets for a rally following retest of key support level](https://editorial.fxstreet.com/images/Avalanche/Avalanche_XtraSmall.jpg)
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
![The election, Trump's Dollar policy, and the future of the Yen](https://editorial.fxstreet.com/images/Macroeconomics/Events/US%20Elections/Donald_Trump_closeup_XtraSmall.jpg)
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.