GBP consolidates as investors sidelined ahead of crucial US GDP data

GBP/USD Forecast: Pound Sterling bulls encouraged as 1.2700 support holds

GBP/USD gathered bullish momentum and advanced to its highest level in nearly two weeks above 1.2770 on Wednesday. Although the pair staged a downward correction in the American session, it managed to post daily gains by stabilizing above 1.2700.

The PMI data from the UK showed that the private sector’s economic activity continued to expand at an accelerating pace in early January. Commenting on the report, “the surprising strength of growth in January, which has exceeded forecasts, may deter the Bank of England (BoE) from cutting interest rates as soon as many are expecting, especially as supply disruptions in the Red Sea are reigniting inflation in the manufacturing sector,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence Supply. Read more…

Pound Sterling consolidates as investors sidelined ahead of crucial US GDP data

The Pound Sterling (GBP) struggles for direction as investors shift focus towards the central bank policy decisions, which are scheduled for next week. The GBP/USD remains sideways as a steady interest rate decision by the Bank of England (BoE) is widely anticipated. Market participants will keenly focus on the outlook for interest rates as strong PMI’s for December has allowed BoE policymakers to support the argument of maintaining interest rates at restrictive levels for a longer period.

Investors should brace for high volatility as the market mood will be guided by the United States Q4 Gross Domestic Product (GDP) data. Upbeat US data would lower the odds advocating an early interest rate-cut by the Federal Reserve (Fed) and support the US Dollar. Read more…