GBP/USD struggles to capitalize on Friday’s bounce

GBP/USD consolidates in a range around 1.2570 area; upside potential seems limited

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading range above mid-1.2500s during the Asian session. Moreover, the fundamental backdrop warrants caution before positioning for an extension of Friday’s bounce from the 1.2475 area, or the lowest level since May. 

The US Dollar (USD) pulled back from a two-year high on Friday after the Personal Consumption Expenditure (PCE) Price Index report for November pointed to signs of inflation moderation and lingering challenges for the economy. This keeps the USD bulls on the defensive and offers some support to the GBP/USD pair. That said, the Federal Reserve’s (Fed) hawkish shift might continue to act as a tailwind for the safe-haven buck. Read more…

GBP/USD rebounds towards 1.2540 following US inflation data and BoE decision

The GBP/USD pair rebounded towards 1.2540 after the release of US inflation data and the Bank of England’s (BoE) monetary policy decision on Thursday. While the pair benefited from softer-than-expected US Personal Consumption Expenditure (PCE) data, the BoE’s cautious stance on rate cuts and weaker UK Retail Sales data kept gains in check.

The US Personal Consumption Expenditure (PCE) data for November revealed softer inflationary pressures. The monthly Headline PCE came in at 0.1%, down from the previous 0.2%, while the yearly measure ticked up slightly to 2.4%, just above the prior 2.3% but below the 2.5% forecast. Meanwhile, the Core PCE monthly measure fell to 0.1% from 0.3%, undershooting the 0.2% estimate, while the yearly reading remained steady at 2.8%, lower than the expected 2.9%. Read more…

Pound Sterling recovers against US Dollar as PCE inflation data comes below expectations

The Pound Sterling (GBP) recovers sharply in North American trading hours after posting a fresh seven-month low near 1.2470 against the US Dollar (USD) on Friday. The GBP/USD pair bounces back as the US Dollar declines after the release of the United States (US) Personal Consumption Expenditure Price Index (PCE) report for November, which showed that price pressures rose moderately.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, retreats below 108.00 after refreshing a two-year high around 108.50 earlier in the day. The PCE inflation report showed that the core inflation, the Federal Reserve’s (Fed) preferred inflation gauge, rose by 2.8% in the year to November, at a slower pace than the 2.9% expected. Month-on-month core PCE inflation rose at a slower pace of 0.1%, against estimates of 0.2% and the former release of 0.3%. Read more…