GBP/USD steadies near 1.2950 as traders digest PCE figures, tariff turmoil

Source Fxstreet
  • US Core PCE rises to 2.8%, reinforcing Fed's inflation concerns and limiting GBP/USD upside near 1.2967.
  • UK Retail Sales beat forecasts, economy grows 0.1% in Q4 2024, boosts Sterling.
  • Market focus now shifts to key US data: ISM PMI, JOLTs, and next week’s crucial Nonfarm Payrolls report.

The Pound Sterling remains firm, hovering around 1.2950 against the US Dollar, virtually unchanged, as traders digest the latest inflation report from the United States (US), amid uncertainty about a potential trade war escalation following Trump's imposition of tariffs on cars. At the time of writing, the GBP/USD exchange rate is 1.2948.

GBP/USD holds firm despite hotter Core PCE and mixed sentiment, as UK data outperforms and trade war fears loom

The Personal Consumption Expenditure (PCE) Price Index released by the US Bureau of Economic Analysis (BEA) remained unchanged at 2.5% YoY in February. The Core PCE print, sought by the Fed as its favorite inflation gauge, expanded 2.8% YoY, up from 2.7% for the same period. Although the prints maintained the status quo, inflation continues to drift away from the Fed’s 2% target.

Recently, the University of Michigan's Consumer Sentiment index deteriorated slightly, falling from 57.9 in the preliminary reading to 57.0. US households turned pessimistic, expecting prices to increase by 5% for a one-year period, while inflation expectations for five years ticked up from 3.9% to 4.1%. The survey said, “This month’s decline reflects a clear consensus across all demographic and political affiliations.”

Across the pond, UK Retail Sales in February dipped compared to January, but exceeded economists' estimates of -0.3%, rising by 1% MoM. Also, the economy grew 0.1% by the end of 2024, as revealed by the Office for National Statistics (ONS), as expected by analysts.

The data pushed the GBP/USD towards its daily peak of 1.2967, but it receded after investors digested US figures.

Next week, the UK economic docket remains absent. In the US, traders are focusing on April’s 2 Trump’s tariffs announcement, the ISM Manufacturing PMI for March, JOLTS Job Openings, and Nonfarm Payrolls.

GBP/USD Price Forecast: Technical outlook

GBP/USD trades sideways with no apparent bias on Friday ahead of the weekend, yet a daily close near the 1.3000 figure could pave the way for further upside. This is because buyers kept the bears from pulling the exchange rate below 1.2900, keeping the pair from testing the 200-day Simple Moving Average (SMA) of 1.2802.

Despite this, bulls are not out of the woods. Although the Relative Strength Index (RSI) is bullish, shows they’re losing some steam, after retreating from overbought territory.

British Pound PRICE This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.21% -0.33% 0.51% -0.48% -0.48% 0.02% -0.28%
EUR 0.21%   -0.23% 0.20% -0.22% -0.30% 0.29% -0.02%
GBP 0.33% 0.23%   0.84% -0.62% -0.09% 0.52% 0.11%
JPY -0.51% -0.20% -0.84%   -0.98% -1.01% -0.46% -0.79%
CAD 0.48% 0.22% 0.62% 0.98%   0.05% 0.50% 0.21%
AUD 0.48% 0.30% 0.09% 1.01% -0.05%   0.58% 0.28%
NZD -0.02% -0.29% -0.52% 0.46% -0.50% -0.58%   -0.23%
CHF 0.28% 0.02% -0.11% 0.79% -0.21% -0.28% 0.23%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Weekly Market Outlook: U.S. October CPI Focus and Powell and Fed Officials SpeakInsights – This week, the U.S. will release October CPI data, with inflation expected to face challenges in easing further. Retail sales data will also be closely watched for insights into the economy, guiding the Fed's future policy.
Author  Mitrade
Nov 11, 2024
Insights – This week, the U.S. will release October CPI data, with inflation expected to face challenges in easing further. Retail sales data will also be closely watched for insights into the economy, guiding the Fed's future policy.
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
【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
Oct 01, Thu
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. 
placeholder
WTI Price Forecast: Dips to $91.50 as Middle East jitters limit lossesWest Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some sellers during the Asian session on Friday, snapping a two-day winning streak and stalling the previous day's recovery from the vicinity of a nearly four-week low.
Author  FXStreet
Oct 02, Fri
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some sellers during the Asian session on Friday, snapping a two-day winning streak and stalling the previous day's recovery from the vicinity of a nearly four-week low.
Related Instrument
goTop
quote