- The United Kingdom GDP surprises with a growth of 0.1%, challenging the fears of recession.
- The US IPP inflation exceeds expectations, strengthening the cautious posture of the Fed on rates cuts.
- The GBP/USD maintains profits, but the technical perspective still favors the decline below 1,2473.
The sterling pound recorded solid profits against the dollar on Thursday after the GDP figures in the United Kingdom surprisingly exceed the estimates. Meanwhile, inflation in the US increased and employment data in the US shows that the labor market remains strong. The GBP/USD quotes at 1,2510, rising 0.53%.
Libra wins but the divergence between the BOE and the Fed limits the bullish potential
The data saved the sterling pound after the preliminary reading of the fourth quarter of 2024 showed that the economy grew by 0.1% intertrmetral, exceeding the estimates of a contraction of -0.1%. In annual terms, GDP increased by 1.5%, above forecasts and previous 1%reading.
In the US, the Office of Labor Statistics (BLS) revealed that the production price index (IPP) was 0.4%monthly in January, above 0.3%estimates, lowering from 0.5%. In year -on -year data, the IPP remained unchanged in 3.5% but exceeded the forecasts.
The underlying figures were also slightly high, with monthly figures rising 0.3% as estimated. In the twelve months until January, the underlying IPP increased 3.6%, three tenths above the 3.3%projection.
Other data showed that initial unemployment subsidy applications for the week that ended on February 8 increased by 213K, below the estimates of 215K and the reading of February 1, 220k.
Given the background, the GBP/USD is operating in green, although the divergence between the central banks favors a higher decline. After the GDP data from the United Kingdom, the markets completely discounted the next cut in June and wait for 55 basic points of flexibility by the Bank of England (BOE) towards the end of 2025.
However, the chief economist of the BOE, Hue Pill, said he waits for more rates cuts but urges caution since the disinflation process is not complete.
Meanwhile, the Fed adopted a cautious posture after the latest inflation readings indicated that the disinflation process stagnated after five consecutive months of price increases. On Wednesday, the president of the Fed, Jerome Powell, said: “We are close but we have not arrived in inflation,” adding, “we want to maintain the restrictive policy for now.”
GBP/USD price forecast: technical perspective
The GBP/USD bearish trend is still intact as the daily chart shows. But if buyers recover the maximum of February 5, 1,2549, the bias changes to neutral since the par would have reached a higher maximum, an indication of a trend change. Further up to 1,2600, and buyers could challenge the single mobile average (SMA) of 100 days in 1,2700.
On the contrary, if the GBP/USD falls below the 50 -day SMA in 1,2473, sellers could push prices towards the 1,2400 level.
LIBRA ESTERLINA PRICE TODAY
The lower table shows the percentage of pounding sterling (GBP) compared to the main currencies today. The sterling pound was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.39% | -0.53% | -0.54% | -0.41% | -0.07% | -0.08% | -0.75% | |
| EUR | 0.39% | -0.15% | -0.13% | -0.02% | 0.30% | 0.30% | -0.37% | |
| GBP | 0.53% | 0.15% | -0.02% | 0.12% | 0.46% | 0.44% | -0.23% | |
| JPY | 0.54% | 0.13% | 0.02% | 0.12% | 0.46% | 0.40% | -0.23% | |
| CAD | 0.41% | 0.02% | -0.12% | -0.12% | 0.35% | 0.32% | -0.35% | |
| Aud | 0.07% | -0.30% | -0.46% | -0.46% | -0.35% | -0.02% | -0.69% | |
| NZD | 0.08% | -0.30% | -0.44% | -0.40% | -0.32% | 0.02% | -0.67% | |
| CHF | 0.75% | 0.37% | 0.23% | 0.23% | 0.35% | 0.69% | 0.67% |
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.
