- Good News: US economy growth for Q3 was reported at 5.2%, above forecasts, indicating robust investment but reduced household spending.
- Federal Reserve’s Future: Federal Reserve officials are divided on future monetary policy, with some suggesting a more dovish approach.
- GBP/USD Outlook: GBP/USD pair’s outlook remains bullish in light of recent comments from Fed Governor Christopher Waller, suggesting the possibility of rate cuts.
In the mid-North American session, the British Pound (GBP) is holding onto minimal gains vs. the Greenback (USD) after US data showed a strong and growing economy. Despite this, some Federal Reserve (Fed) officials remained dovish, while investors started to anticipate a dovish Fed. The GBP/USD is currently trading at 1.2703, just slightly above the 1.2700 figure.
Expectations for More: Pound Sterling remains underpinned by expectations for over 100 bps of rate cuts by the Fed in 2024
Recent Reports: A recent report by the US Bureau of Economic Analysis (BEA) showed the US economy grew faster than expected, rising by 5.2% in Q3, above the 2.1% from the second quarter. Although the country’s economy is growing above trend, Fed policymakers have differing views on policy, with some leaning towards a more restrictive approach and others open to rate increases.
On the other side of the Atlantic, the Pound Sterling failed to gain traction after UK consumer credit data showed increased borrowing by the most in five years. The Bank of England’s (BoE) Governor Andrew Bailey made hawkish comments, stating that they “will do what it takes” to get inflation to its 2% target.
Technical Analysis: After hitting a multi-month high at 1.2733, the GBP/USD retreated below the 1.2700 figure, signaling a potential pullback. Traders are facing indecision, but a bullish scenario could emerge if the exchange rate climbs above 1.2700 and achieves a daily close above that level. The next critical resistance levels to watch for are 1.2733 and 1.2800.
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