GBP/USD falls to near 1.3150 ahead of US PCE data
|- GBP/USD loses ground as traders adopt caution ahead of US Personal Consumption Expenditure Price Index data.
- US Gross Domestic Product grew at 3.0% in Q2, exceeding both the expected and previous growth rate of 2.8%.
- The Pound Sterling may gain ground as traders expect the BoE to maintain higher rates for a longer period.
GBP/USD loses ground for the third successive session, trading around 1.3160 during the Asian hours on Friday. This downside could be attributed to the improved US Dollar (USD) following stronger-than-expected economic data released on Thursday. Investors await July’s US Personal Consumption Expenditure (PCE) Price Index scheduled to be released later in the North American Session.
The US Gross Domestic Product Annualized grew at 3.0% in the second quarter, exceeding both the expected and previous growth rate of 2.8%. Additionally, Initial Jobless Claims showed that the number of people filing for unemployment benefits fell to 231,000 for the week ending August 23, down from the previous 233,000 and slightly below the expected 232,000.
However, dovish remarks from the Federal Reserve could constrain further gains for the Greenback. Federal Reserve Atlanta President Raphael Bostic, a prominent hawk on the FOMC, indicated on Thursday that it might be "time to move" on rate cuts due to further cooling inflation and a higher-than-expected unemployment rate. However, Bostic wants to wait for confirmation from the upcoming monthly jobs report and two inflation reports before the Fed's September meeting.
The downside for the Pound Sterling (GBP) may be limited, as traders anticipate that the Bank of England (BoE) will maintain higher interest rates for a longer period compared to the US Federal Reserve (Fed). The BoE reduced rates by 25 basis points to 5% on August 1, and money markets are pricing in an additional 40 basis points of cuts by the end of the year.
In his speech at the Jackson Hole Symposium last week, BoE Governor Andrew Bailey indicated that the second-round effects of inflationary pressures would be less significant than anticipated. However, Bailey also advised against hastening additional interest rate cuts, according to Reuters.
British Pound PRICE Today
The table below shows the percentage change of the British Pound (GBP) against listed major currencies today. The British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.02% | -0.13% | 0.00% | -0.14% | -0.13% | 0.03% | |
| EUR | -0.02% | -0.00% | -0.14% | -0.01% | -0.16% | -0.17% | 0.02% | |
| GBP | -0.02% | 0.00% | -0.13% | -0.01% | -0.16% | -0.16% | 0.01% | |
| JPY | 0.13% | 0.14% | 0.13% | 0.14% | -0.00% | -0.02% | 0.17% | |
| CAD | -0.00% | 0.01% | 0.01% | -0.14% | -0.16% | -0.13% | 0.02% | |
| AUD | 0.14% | 0.16% | 0.16% | 0.00% | 0.16% | -0.01% | 0.17% | |
| NZD | 0.13% | 0.17% | 0.16% | 0.02% | 0.13% | 0.00% | 0.17% | |
| CHF | -0.03% | -0.02% | -0.01% | -0.17% | -0.02% | -0.17% | -0.17% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
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