GBP/USD trades with modest gains around mid-1.2000s, eyes US PCE for fresh impetus – Crypto News – Crypto News
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Retreats towards 1.1800 but bears have a bumpy road ahead Retreats towards 1.1800 but bears have a bumpy road ahead

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GBP/USD trades with modest gains around mid-1.2000s, eyes US PCE for fresh impetus – Crypto News

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3 years ago

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  • GBP/USD attracts some buying on the last day of the week amid a modest USD weakness.
  • A positive risk tone weighs on the buck, though hawkish Fed expectations help limit losses.
  • Investors now look to the US PCE data to determine the near-term trajectory for the majors.

The GBP/USD pair gains some positive traction on the last day of the week and snaps a two-day losing streak to over a three-week low touched on Thursday. Spot prices stick to intraday gains, around the 1.2055-1.2060 area through the first half of the European session, though struggle to move back above the very important 200-day SMA.

The US Dollar comes under some renewed selling pressure and turns out to be a key factor pushing the GBP/USD pair higher. A modest recovery in the equity markets is seen undermining the safe-haven buck, though looming recession risks could help limit the downside. Apart from this, speculations that the fed will stick to its policy-tightening cycle supporting prospects for the emergence of some dip-buying around the USD.

Worries about the economic headwinds stemming from a surge in new COVID-19 cases in China, along with geopolitical risk, might keep a lid on any optimism in the markets. In fact, Russia said on Wednesday that the continued arms supplies by Western allies to Ukraine would lead to a deepening of the ongoing conflict. Furthermore, North Korea reportedly fired a ballistic missile towards the sea off its east coast on Friday.

Meanwhile, the upbeat US macro data released on Thursday pointed to a still-tight labor market and resilient economy. This could allow the Federal Reserve to continue raising borrowing costs to tame inflation, which acts as a tailwind for the US Treasury bond yields. The USD bulls, however, prefer to wait for the release of the US Personal Consumption Expenditure (PCE) data later during the early North American session.

The Core PCE Price Index, the Fed’s preferred inflation gauge, will provide fresh cues on inflation and influence the US central bank’s rate-hike path. This, in turn, will play a key role in driving the USD demand in the near term and help investors to determine the next leg of a directional move for the GBP/USD pair,

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