- GBP / USD gained some traction on Thursday and recovered some of the losses overnight.
- The USD extended its consolidated price action and extended some support to the pair.
- Mixed economic data from the US did little to impress traders or provide a significant boost.
The pair GBP/USD it rose throughout the early days of the American session and rose to new daily highs, around the 1.3475-80 region after US macroeconomic data.
The US dollar now appears to have entered a bullish consolidation phase and was seen oscillating in a range just below the highest level since September 2020 touched earlier this Thursday. The prevailing risk climate coupled with a softer tone around US Treasury yields prevented the USD bulls from making any further bets.
This was seen as a key factor that extended some support to the GBP / USD pair, which saw a slight increase following an upward revision of the UK GDP figure for the second quarter of 2021. The Office for National Statistics reported that the UK expanded 5.5% during the April-June period versus the first estimate of a 4.8% increase.
On the other hand, US GDP growth was also revised modestly high to an annualized rate of 6.7% from the preliminary estimate for an increase of 6.6%. This, however, was overshadowed by an unexpected increase in weekly initial jobless claims. In fact, the number of Americans applying for unemployment benefits increased from 351,000 to 362,000 last week.
That said, expectations that the Fed would begin to reduce its massive pandemic-era stimulus as early as November and raise interest rates in 2022 helped limit the USD’s deeper losses. Aside from this, the current fuel crisis in Britain could do even more to keep any further gains for GBP / USD limited, at least for the time being.
Thursday’s US economic agenda also includes the Chicago PMI release, although the focus will be on Fed Chairman Jerome Powell’s testimony before the Financial Services Committee. Apart from this, US bond yields and general market risk sentiment will influence USD price dynamics and provide some boost to GBP / USD.