GBPUSD is rising following the release of higher than expected UK GDP statistics on Friday.
GBPUSD crept up to about 1.2540 during Asian hours on Friday, boosted by the announcement of higher-than-expected first-quarter UK GDP statistics. GDP (QoQ) increased by 0.6%, reversing the previous quarter’s 0.3% contraction and above estimates of 0.4% growth. In addition, GDP (YoY) grew by 0.2%, reversing a 0.2% loss.
The Pound Sterling may face hurdles if the BoE cuts interest rates next month.
However, the Pound Sterling (GBP) has faced headwinds following the Bank of England’s (BoE) decided to keep interest rates at 5.25% on Thursday. According to Reuters, BoE Governor Andrew Bailey stated at the post-decision press conference that “a rate cut next month was a possibility,” but that he will wait for inflation, activity, and labor market data before making a decision. This has increased the likelihood of further interest rate cuts, putting pressure on the British pound and lowering the GBPUSD pair.
US Treasury yields fell after the reporting of lower US first jobless claims on Thursday.
Following that, the US Bureau of Labor Statistics (BLS) issued data showing that the number of people applying for unemployment benefits exceeded estimates. Initial jobless claims for the week ending May 3 surged to 231,000, above expectations of 210,000 and increasing from the previous week’s reading of 209,000. This indicates a possible trend towards a less The Federal Reserve (Fed)’s hawkish policy stance has put pressure on US Treasury yields and undermined the US Dollar (USD).
On Friday, the preliminary Michigan Consumer Sentiment Index was expected to indicate a modest dip in May. This index is a study of consumer sentiment in the United States, including three main areas: personal finances, business conditions, and buying conditions.
