- GBP/USD has not displayed a sheer response to the upbeat UK GDP data.
- The UK economy has delivered a growth rate of 0.2% and 4.4% on a monthly and annual basis.
- The DXY has surrendered the critical support of 112.00 amid improved risk appetite.
The GBP/USD pair has slipped below the immediate support of 1.1150 despite upbeat UK Gross Domestic Product (GDP) data. The UK National Statistics has reported the economic activities in the UK economy have grown by 0.2% against the expectation of a decline of 0.1% on a quarterly basis. Also, the annual data has improved dramatically to 4.4% vs. the projections and the prior release of 2.9%.
The cable is auctioning in a positive trajectory despite a surprise announcement of the bond-purchase program by the Bank of England (BOE). A 13-day bond-buying program has been announced in which the BOE will purchase GBP 5 billion worth of long-dated bonds each day. At times, when the BOE is dedicated to bringing price stability, liquidity infusion could offset the impact of accelerating interest rates to some extent.
The US dollar index (DXY) witnessed a steep fall this week after soaring expectations of a slowdown in the current pace of hiking interest rates sooner. It is worth noting that Fed’s interest rate peak is not far from current interest rates at 3.-3.325% after a scrutiny of the ongoing velocity of hiking interest rates. The Fed is expected to maintain the terminal rate at 4.6% for a longer period as discussed in the reported economic projections till it find a slowdown in the price pressures for several months.
In September, the market reaction towards the higher-than-expected headline Consumer Price Index (CPI) and core CPI, despite falling gasoline prices, was extremely risk-averse. In retaliation to that, the Fed has announced a rate hike by 75 basis points (bps). Therefore, the impact of Friday’s US Personal Consumption Expenditure (PCE) is expected to remain muted. As per the consensus, the core PCE index is seen 10 bps higher at 4.7% than the prior release.
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 tumbles to 2024 lows near 1.0460
The US Dollar gathers extra pace and weigh on the risk complex, sending EUR/USD to new YTD lows near the 1.0460 region as the NA draws to a close on Thursday.
GBP/USD dips to multi-month lows around 1.2570
Further losses now motivate GBP/USD to revisit the vicinty of the 1.2570 zone for the first time since early May, always on the back of the strong move higher in the Greenback.
Gold faces extra upside near term
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
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.