Pound sterling is struggling to find a direction ahead of important data.

The Pound Sterling (GBP) moves in a confined range, with the downside cushioned by improved market mood. But gains limited by the UK economy’s lackluster growth prospects. The GBPUSD pair’s near-term demand is determined by the success of the UK economy in the fourth quarter of 2023.

However, according to the most recent UK economic data. The manufacturing sector maintained its decline in October due to rising borrowing. Costs and the expense of living are in crisis. This has cast a shadow over the growth rate in the October-December period.

To protect the economy from a recession, the Bank of England maintains interest rates stable.

The Bank of England (BoE) kept interest rates at 5.25% for the second time in a row on Thursday. In order not to stomp on the minimal growth that exists. There are hints that the economy is barely avoiding a recession. Business optimism has fallen to a ten-month low. Forcing firms to make significant cuts to payrolls, purchases, and inventory. In terms of the inflation outlook, Bank of England Governor Andrew Bailey appears confident. That the central bank can reduce inflation to 2% in two years.

Daily Market Movers: The Pound Sterling awaiting US Non-Farm Payrolls data.

The pound sterling trades inside Thursday’s range. Indicating a dramatic decrease in volatility ahead of important US data.

The GBPUSD pair rose to 1.2220 after the Bank of England (BoE) announced a stable interest rate decision.

Megan Greene, Jonathan Haskel, and Katherine Mann voted for a 25 basis point (bps) rate hike. While the remaining six policymakers opted to retain the status quo.

The Pound Sterling’s upside remained limited as the Bank of England kept interest rates constant at 5.25%, citing concerns that the economy would enter a recession.

Due to Middle East tensions, deteriorating labor demand, a negative demand forecast, poor consumer spending, and other factors, the growth rate in the coming quarters is anticipated to remain static. The housing market is in disarray.

According to S&P Global, the UK manufacturing decline continued at the start of the fourth quarter, implying that the factory sector remained a drag on an economy already on the verge of recession.

In terms of interest rate advice, Bank of England Governor Andrew Bailey cautioned that the central bank will keep rates high long enough to squeeze out excess pricing pressures over the 2% inflation objective.

Moreover Andrew Bailey left the door open for future policy tightening but ruled out rate cuts in the near term, citing the UK economy’s high inflation among G7 economies.

Bank of England predicted that headline inflation will fall to 4.6%.

The Bank of England predicted that headline inflation will fall to 4.6% by the fourth quarter of 2023. Inflation is expected to moderate in the next one to two years. 3% and 1.9%, respectively.

According to the central bank’s latest inflation predictions, UK Prime Minister Rishi Sunak will keep his goal to reduce inflation to 5.4% by the end of the year.

Meanwhile, rising Middle East tensions keep global economies on edge. The Israeli army has announced that its troops have ringed Gaza and that no ceasefire is imminent.

Furthermore US Secretary of State Anthony Blinken has arrived in Israel for discussions to halt an Israeli Defense Forces (IDF) ground invasion in order to secure the delivery of humanitarian goods and to take meaningful steps to protect hostages.

US Dollar is trading sideways as investors await the release of October Nonfarm Payrolls.

The US Dollar is trading sideways as investors await the release of October Nonfarm Payrolls (NFP) data at 12:30 GMT.

As per According to predictions, US firms will hire 180K workers in October, compared to an unexpectedly higher reading of 336K in September. The unemployment rate remains stable at 3.8%.

Moreover For interest rate advice, investors will closely monitor Average Hourly Earnings, a measure of pay inflation. Monthly, Average Hourly Earnings are expected to grow at a faster rate of 0.3%, compared to a 0.2% growth in September. The yearly data is expected to slow to 4.0% from 4.2% previously.