GBP/USD hovers above 1.2550 ahead of UK GDP, Fed policy decision
- GBP/USD remains calm before a slew of data releases from both countries.
- UK GDP and Industrial Production both are expected to face a 0.1% decline.
- US CPI and Core CPI adhered to expectations, with a year-on-year increase of 3.1% and 4.0%, respectively.
GBP/USD exhibits a sideways movement as it braces for a barrage of data releases from both nations, hovering above 1.2550 in the Asian session on Wednesday. The GBP/USD pair experienced notable volatility in the previous session, driven by employment data from the United Kingdom (UK) and inflation figures from the United States (US).
The UK Office for National Statistics revealed that the Claimant Count Change for November increased to 16.0K from the previous figure of 8.9K, but fell short of the 20.3K expectations. Additionally, the Employment Change for October decreased to 50K from the previous 54K.
Investors are anticipating more data on Wednesday, with the UK monthly Gross Domestic Product (GDP) and Industrial Production both expected to decline by 0.1% in October. Furthermore, on Thursday, the Bank of England (BoE) is expected to deliver a hawkish hold, keeping interest rates unchanged at 5.25%.
On the other side, market participants await the release of the US Producer Price Index (PPI) and the Federal Reserve’s (Fed) Interest Rate Decision later in the North American session. The US Dollar (USD) experienced a modest drop and recovery after the release of moderate Consumer Price Index (CPI) data from the United States (US).
On Tuesday, the US Bureau of Labor Statistics disclosed that the US Consumer Price Index (CPI) increased by 0.1% month-on-month and 3.1% year-on-year in November. These numbers matched market expectations, suggesting that inflation remained in line with predictions. The US Core CPI also experienced a 0.3% month-on-month and 4.0% year-on-year uptick, meeting anticipated levels.
The Federal Open Market Committee (FOMC) is expected to maintain its current policy stance in its upcoming December meeting. Investors will likely pay close attention to the comments from Federal Reserve (Fed) Chair Jerome Powell, seeking insights into any potential changes in interest rates for the upcoming year.