- GBP/USD meets with a fresh supply on Friday and snaps a three-day winning streak.
- A combination of factors pushes the USD to a one-month high and exerts pressure.
- Bulls seem rather unimpressed and largely shrug off the mixed UK economic data.
The GBP/USD pair extends the previous day's retracement slide from the vicinity of the 1.2200 mark, or the weekly high and remains under some selling pressure on Friday. Spot prices languish around the 1.2100 mark through the early European session and react little to the latest UK macro data.
The UK Office for National Statistics reported that the economy contracted by 0.5% in December, down from 0.1% growth reported in the previous month and missing estimates for a 0.3% fall. The Preliminary Q4 GDP print, meanwhile, matched expectations and showed that the economy stagnated during the October-December period as compared to a 0.3% decline in the third quarter. The slight disappointment, however, was offset by better-than-expected UK Manufacturing and Industrial Production figures.
Nevertheless, the mixed economic data fails to push back against market speculations that the Bank of England's rate-hiking cycle is nearing the end and undermines the British Pound. This, along with the prevalent US Dollar buying interest, contributes to the offered tone surrounding the GBP/USD pair. Against the backdrop of hawkish signals from Fed officials, a fresh wave of the global risk-aversion trade turn out to be a key factor that continues to underpin the safe-haven Greenback.
The GBP/USD pair, for now, seems to have snapped a three-day winning streak, though the lack of follow-through selling warrants some caution for aggressive bearish traders. Traders now look forward to the US economic docket, featuring the release of the Preliminary Michigan Consumer Sentiment Index. This, along with a scheduled Fed Governor Christopher Waller's speech, the US bond yields and the broader risk sentiment, will drive the USD and provide some impetus to the GBP/USD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats below 1.0500 as US Dollar finds fresh demand
EUR/USD is back in the red below 1.0500 in the European session on Tuesday. A negative shift in risk sentiment revives the haven demand for the US Dollar, while the mixed sentiment data from Germany hurts the Euro, weighing down on the pair.
GBP/USD recovers toward 1.2700 after UK jobs data
GBP/USD recovers toward 1.2700 in the European morning on Tuesday. The data from the UK showed that the ILO Unemployment Rate held steady at 4.3% in the three months to October, while the annual wage inflation climbed to 5.2%, helping Pound Sterling hold its ground.
Gold price remains confined in a range ahead of the crucial Fed decision on Wednesday
Gold price struggles to gain any meaningful traction and remains confined in a narrow range. Expectations for a less dovish Fed and elevated US bond yields cap the non-yielding XAU/USD. Geopolitical risks lend support to the safe-haven precious metal ahead of the FOMC meeting.
Ripple reveals official launch for RLUSD, XRP eyes new all-time high at $4.75
Ripple confirmed in a press release on Monday that its RLUSD stablecoin will officially launch on Tuesday across exchanges, including MoonPay, Uphold, CoinMENA, Bitso and ArchaxEx. Bullish sentiments surrounding the launch could help XRP overcome the $2.58 and $2.92 resistance levels.
Will the Fed cut interest rates again and why is the dot plot important Premium
The Fed is expected to cut interest rates on Wednesday for the third consecutive meeting. Every time the Fed decides on rates, it is a crucial event as it directly affects families and businesses in the United States. Moreover, the Fed’s last meeting of the year will also be important because it will provide the outlook for what it expects to do in 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.