-
GBP/USD rises on elevated speculation of interest rate cuts by the Fed in early 2024.
-
Downbeat US Treasury yields put pressure on the US Dollar.
-
Former Dallas Fed President Robert Kaplan expects the Fed not to be overly restrictive.
-
UK Retail Sales showed improvement in November. While UK GDP came in softer in Q3.
GBP/USD hovers around 1.2720 during the Asian session on Wednesday. The US Dollar (USD) encounters downward pressure against Pound Sterling (GBP) as growing speculations of potential easing by the US Federal Reserve (Fed).
A fall in US Treasury yields exacerbated bearish sentiment, which contributed to factors undermining the strength of the US dollar. The 2-year and 10-year yields on US bond coupons trade lower, standing at 4.29% and 3.88% respectively at the time of writing.
Former Dallas Federal Reserve President Robert Kaplan shared his thoughts with the media on Tuesday. Kaplan emphasized the Federal Reserve’s past mistakes of prolonged overaccommodation despite positive economic indicators. He believes that the central bank is now wary of repeating this mistake on the upside, not being overly restrictive and stifling economic growth.
The British pound (GBP) found support on Friday, thanks to expected retail sales figures from the United Kingdom (UK) in November. Retail sales (month-on-month) rose 1.3%, beating forecasts of 0.4% and rebounding from a stagnant 0.0% fall in October. Retail sales (YoY) beat market expectations, increasing 0.1% compared to an expected decline of 1.3%. This marked a reversal from the previous 2.5% decline
However, UK Gross Domestic Product (GDP) was below expectations for Q3. GDP (YoY) came in at just 0.3% versus the forecast hold at 0.6%. GDP (QoQ) forecast fell 0.1% compared to a flat reading of 0.0%.
On Thursday, Initial Jobless Claims and Pending Home Sales from the United States (US) will be released. In the absence of the high-impact data from the UK’s docket, the low-impact Nationwide Housing Prices is due on Friday.
GBP/USD: ADDITIONAL IMPORTANT LEVELS
