- The GBP/USD advances Thursday, driven by US PPI data and the increase in initial unemployment subsidy applications.
- The GDP of the United Kingdom contracted 0.3% in April, the largest monthly drop since the late 2022.
- The markets now discount 52 Basic Points of Fed cuts by the end of the year, weakening the USD.
The GBP/USD extended its profits on Thursday after the publication of another inflation report in the United States (USA), which increased the chances of the Federal Reserve (FED) could resume its flexibility cycle before expected. This, together with an increase in unemployment subsidy applications, was a tail wind for the sterling pound, which is quoted at 1,3600 against the US dollar (USD), with an increase of more than 0.47%.
The sterling pound rises more than 0.45% on Thursday while US data increases the expectations of fees of the Fed, despite the fall of the United Kingdom GDP
The US Labor Statistics Office (BLS) revealed that the production price index (IPP) in May increased a 2.6% year -on -year, two tenths above the reading of April. At the same time, the underlying IPP – which excludes volatile elements such as food and energy – fell from 3.1% to 3% year -on -year.
Today’s data, together with the publication of softest inflation figures on the consumer side, led investors to completely discount 52 basic points of interest rate cuts by the Fed towards the end of the year. Until now, the effect of the controversial tariffs imposed by the Trump administration has not been reflected in the inflation data.
Other data revealed that the number of Americans who request unemployment benefits increased. Initial unemployment subsidy applications for the week that ended on June 7 increased by 248K, without changes but above 240K forecasts.
In the United Kingdom, the figures of the Gross Domestic Product (GDP) revealed the most significant economic contraction in 18 months, with a GDP from -0.3% month to month (MOM). After the data, the operators increased the bets that the Bank of England (BOE) could continue to reduce rates in 2025, discounting so far two feats of fees.
Although the number justified a general weakness of the US dollar, as seen in the GBP/USD, caused by the policies implemented by Washington, keeping the USD pressured.
Looking ahead, the United Kingdom’s economic calendar will be absent. In the US, the operators will be attentive to the consumer’s feeling index of the University of Michigan.
GBP/USD price forecast: Technical Perspectives
The GBP/USD maintains a bullish bias, but despite reaching an annual maximum of 1,3623, buyers could not keep prices above 1.36. The impulse remains bullish, as the relative force index (RSI) shows, which is about to reach overcompra territory.
That said, the first resistance of the GBP/USD would be the annual maximum to date in 1,3626, followed by 1.37 and 1,3750. On the contrary, if the torque remains below 1.36, this would clear the way to challenge the simple mobile average (SMA) of 20 days in 1,3521, followed by 1.35 and the 50 -day SMA in 1,3319.
LIBRA ESTERLINA PRICE THIS WEEK
The lower table shows the percentage of sterling pound (GBP) compared to the main currencies this week. Libra sterling was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.57% | -0.44% | -0.83% | -0.57% | -0.39% | -0.71% | -1.05% | |
| EUR | 1.57% | 1.13% | 0.73% | 0.99% | 1.21% | 0.85% | 0.52% | |
| GBP | 0.44% | -1.13% | -0.31% | -0.14% | 0.08% | -0.28% | -0.61% | |
| JPY | 0.83% | -0.73% | 0.31% | 0.26% | 0.40% | 0.07% | -0.33% | |
| CAD | 0.57% | -0.99% | 0.14% | -0.26% | 0.18% | -0.14% | -0.48% | |
| Aud | 0.39% | -1.21% | -0.08% | -0.40% | -0.18% | -0.35% | -0.69% | |
| NZD | 0.71% | -0.85% | 0.28% | -0.07% | 0.14% | 0.35% | -0.33% | |
| CHF | 1.05% | -0.52% | 0.61% | 0.33% | 0.48% | 0.69% | 0.33% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the sterling pound from the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the GBP (base)/USD (quotation).
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.
