GBP/USD holds steady amid soft US inflation, ahead of Fed and BoE’s decision

Source Fxstreet
  • GBP/USD stable in mid-North American session post US data, with soft inflation boosting rate cut expectations.
  • US PCE Index shows steady headline inflation at 2.6%; core rate drops to 2.9%, hinting at possible May Fed rate cut.
  • Focus shifts to upcoming central bank decisions; Fed likely to hold rates, BoE expected to maintain Bank Rate.

The GBP/USD was virtually unchanged in the mid-North American session on Friday after data from the United States (US) was released. A softer inflation reading was cheered by investors, who remained confident the Federal Reserve (Fed) would cut rates in May. Despite that, the major remains flat, hovering around 1.2700, set to finish the week with minuscule gains.

GBP/USD hovers around its opening price following soft US PCE data; traders eye central bank decisions

The US Personal Consumption Expenditures (PCE) Price Index was revealed by the US Department of Commerce suggesting that inflation continues its downtrend. Headline inflation rose by 2.6%, unchanged compared to November’s and expected figures, while the underlying measures dropped from 3.2% to 2.9%. Although the data could allow a rate cut by the Fed, investors estimate the first one would be in May, according to the Chicago Board of Trade (CBOT). Money market traders expect Fed Chair Jerome Powell and Co. to lower rates to 4% by the year’s end.

Given the fundamental backdrop, GBP/USD traders eye the next week’s monetary policy decisions by both central banks. The Fed is expected to keep rates unchanged on January 31, though market participants will be eyeing Powell’s press conference.

Across the pond, the Bank of England (BoE) is foreseen to keep the Bank Rate at 5.25%, although with a unanimous vote, than the previous 6-3 split by February 1. Investors are eyeing the release of economic projections and the BoE’s press conference.

GBP/USD Price Analysis: Technical outlook

From a technical standpoint, the GBP/USD remains neutrally biased, thought at the brisk of tilting to the downside, as price action closes into the 50-day moving average (DMA), the first support level at 1.2654. if sellers break below the 1.2700 figure and the latter, further downside is seen. The next demand zone would be the January 5 low of 1.2611 and the 1.2600 figure. On the upside, the pairJanuary first resistance would be the January 24 cycle high at 1.2774, before testing 1.2800.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decisionThe US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
Author  Mitrade
Sep 28, Mon
The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
placeholder
Nvidia's $150 billion buyback landed — and the AI sector fell anyway. That's the signal worth tradingNvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.
Author  Irene Q.
Sep 29, Tue
Nvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.
placeholder
【Daily Brief】30-year Treasury tops 5.59%, S&P 500 slips to 7,670 and gold holds $4,180 — PCE lands tonightThe 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
Author  Suzie
Sep 30, Wed
The 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
placeholder
Gold falls to near $4,150 as higher Treasury yields, oil prices outweigh softer PCE inflationGold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
Author  FXStreet
5 hours ago
Gold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
Related Instrument
goTop
quote