GBPUSD pair oscillates above the 1.2700 region.
During the early Asian session on Thursday, the GBPUSD pair oscillates above the 1.2700 region. Market participants prefer to remain passive when important statistics from the US and UK are being released. The US inflation rate may cause market volatility later in American trading hours.
The Bank of England (BoE) might hold off on aggressively tightening policy as a result of the weaker UK GDP figures.
Huw Pill, the chief economist for the Bank of England (BoE), predicted interest rates last week. To continue to be high for a longer time. He continued by saying that the central bank would become increasingly dependent on data. And that policymakers would adjust as the economy and the data changed. At its policy meeting in August, the Bank of England (BoE) increased interest rates by 25 basis points (bps), bringing them to a 15-year high of 5.25% from 5%.
The Gross Domestic Product (GDP) data on Thursday will be the main focus of investors looking for new momentum. The Bank of England (BoE) may decide against aggressively tightening policy as a result of the figure being weaker than anticipated. This adds pressure to the British pound. Moving on, the UK will present its initial estimate of Q2 GDP on Friday. It is anticipated that the yearly growth rate will stay at 0.2%. Additionally, data on UK manufacturing and industrial production will be due. The US Consumer Price Index (CPI) and Producer Price Index (PPI) for July will be the two most important events on the US calendar. These data can indicate a clear trend for the GBPUSD exchange rate.
The Federal Reserve is expected to put a stop to rate hikes at its September meeting.
Recent Federal Reserve (Fed) speakers’ comments on the US dollar market suggested that the Fed’s policy has changed from continuing to raise interest rates to holding them constant.
The central bank can keep interest rates at their current levels, according to Patrick Harker, president of the Philadelphia Fed. Raphael Bostic, president of the Atlanta Fed, says that no further rate increases are required.
Furthermore, futures on the money market do not predict rising borrowing costs. The market believes there is an 86.0% likelihood that the Federal Reserve will decide to stop raising interest rates at its meeting in September, according to the CME FedWatch tool. The US inflation figures, however, will provide cues regarding the Fed’s future monetary policy at its next meeting. The central bank’s dovish outlook may restrain the dollar’s gains and boost the GBPUSD currency pair.
