GBP/USD climbs sharply, back above 1.2380 as traders eye US GDP – Crypto News – Crypto News
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GBP/USD advances towards 1.1850 as DXY sees exhaustion, Jackson Hole buzz GBP/USD advances towards 1.1850 as DXY sees exhaustion, Jackson Hole buzz

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GBP/USD climbs sharply, back above 1.2380 as traders eye US GDP – Crypto News

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  • GBP/USD bounces off weekly lows and reclaims 1.2300 on a soft US Dollar.
  • The Producer Price Index in the UK cools down, sparking speculation that the Bank of England could tighten but not as aggressively as foreseen.
  • Thursday’s US economic docket will feature GDP, unemployment claims, Durable Good Orders, and core PCE.

The GBP/USD climbs solidly and trims two days of consecutive losses after hitting a weekly low of 1.2263 on Wednesday. risk aversion is the game’s name, while the US Dollar (USD) is paring some of its earlier losses, underpinned by rising US bond yields. The GBP/USD is trading at 1.2384, clinging to gains of 0.42%.

UK’s Producer Price Index eases, ahead of the BoE’s next week’s meeting

During the European session, the GBP/USD slid to the lows of the day at 1.2282 amid news that the UK’s Producer Price Index (PPI) for December cooled the most since April 2020, which would ease pressures for the Bank of England (BoE). Input prices paid by factories dropped -1.1% MoM, while the year-over-year data dropped 1.5% from 18% to 16.5%. Regarding Output prices, it fell -0.8% MoM beneath estimates for a 0.1% gain, while on an annual basis, it fell to 14.7% from 16.2%.

Therefore, speculations that the BoE would reassess how much tightening is needed to curb inflation weakened the GBP/USD. Additionally, weaker than-estimated UK PMIs for December, revealed Tuesday, sparked recessionary fears.

Meanwhile, the greenback has continued to weaken across the G8 FX board, as shown by the US Dollar Index, down 0.15%, staying at 101.767. Contrarily, US Treasury bond yields, paired with earlier losses, sit at 3.465%.

Aside from this, traders are bracing for a busy Thursday’s round of US economic data to be unveiled. The US economic docket will feature the Advance in Gross Domestic Product (GDP) for Q4, expected at 2.6%. Further, Durable Good Orders are expected to recover to 2.5%, compared to last month’s -2.1% plunge. Unemployment claims for last week would also be updated, along with the US Federal Reserve Core PCE inflation reading.

Therefore, with money market futures chances at 75% of witnessing a 50 bps rate hike at the BoE meeting, further GBP/USD upside is expected.

GBP/USD Key Technical Levels

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