- GBP/USD loses ground as traders turn cautious ahead of US Personal Consumption Expenditure Price Index data.
- U.S. gross domestic product grew 3.0% in the second quarter, beating both the expected and prior growth rate of 2.8%.
- The British Pound could gain ground as traders expect the BoE to keep rates higher for a longer period.
GBP/USD lost ground for the third consecutive session, trading around 1.3160 during Asian hours on Friday. This drop could be attributed to the stronger US Dollar (USD) following stronger-than-expected economic data released on Thursday. Investors are awaiting the US Personal Consumption Expenditure (PCE) Price Index for July, scheduled to be released later in the North American session.
The annualized U.S. gross domestic product grew by 3.0% in the second quarter, exceeding both the expected and prior growth rate of 2.8%. In addition, Initial Jobless Claims showed that the number of people applying for unemployment benefits fell to 231,000 in the week ending August 23, from 233,000 previously and slightly below the 232,000 expected.
However, dovish comments from the Federal Reserve could limit further gains for the dollar. Atlanta Fed President Raphael Bostic, a prominent hawk on the FOMC, indicated on Thursday that it may be “time to act” on rate cuts due to a further slowdown in inflation and a higher than expected unemployment rate. However, Bostic wants to wait for confirmation from the next monthly jobs report and two inflation reports before the Fed meeting in September.
The fall in the British Pound (GBP) could be limited as traders anticipate that the Bank of England (BoE) will keep interest rates higher for a longer period compared to the US Federal Reserve (Fed). The BoE cut rates by 25 basis points to 5% on August 1, and money markets are pricing in a further 40 basis point cut by the end of the year.
Speaking at the Jackson Hole Symposium last week, BoE Governor Andrew Bailey indicated that the second-round effects of inflationary pressures would be less significant than anticipated. However, Bailey also advised against rushing into further interest rate cuts, according to Reuters.
Pound Sterling PRICE Today
The table below shows the exchange rate of the British Pound (GBP) against major currencies today. The British Pound was the strongest currency against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.02% | -0.13% | 0.00% | -0.14% | -0.13% | 0.03% | |
| EUR | -0.02% | -0.00% | -0.14% | -0.01% | -0.16% | -0.17% | 0.02% | |
| GBP | -0.02% | 0.00% | -0.13% | -0.01% | -0.16% | -0.16% | 0.01% | |
| JPY | 0.13% | 0.14% | 0.13% | 0.14% | -0.00% | -0.02% | 0.17% | |
| CAD | -0.00% | 0.01% | 0.01% | -0.14% | -0.16% | -0.13% | 0.02% | |
| AUD | 0.14% | 0.16% | 0.16% | 0.00% | 0.16% | -0.01% | 0.17% | |
| NZD | 0.13% | 0.17% | 0.16% | 0.02% | 0.13% | 0.00% | 0.17% | |
| CHF | -0.03% | -0.02% | -0.01% | -0.17% | -0.02% | -0.17% | -0.17% |
The heatmap shows percentage changes of major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change shown in the chart will represent the GBP (base)/USD (quote).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
