Pound Sterling trades mixed ahead of UK Q1 GDP data
- The Pound Sterling jumps to near 1.3350 against the US Dollar as the Greenback suffers after soft US inflation data for April.
- The US headline CPI grew by 2.3%, the lowest level in over four years.
- Investors await the flash Q1 UK GDP data scheduled for Thursday for further cues about the health of the economy.
The Pound Sterling (GBP) demonstrates a mixed performance against its major peers on Wednesday as investors reassess market expectations for the Bank of England’s (BoE) monetary policy outlook for the remainder of the year after the release of the labor market data for the three months ending March on Tuesday.
The data showed lower job growth, a higher Unemployment Rate, and slowing wage growth. It seems that businesses lightened their hiring process ahead of an increase in employers’ contributions to social security schemes that came into effect in April.
Meanwhile, moderate growth in Average Earnings data is expected to provide relief to BoE officials. Policymakers pay close attention to the wage growth data as it is a major driver of inflation in the services sector, a key factor behind persistent United Kingdom (UK) price pressures.
Despite increasing hopes of cooling price pressures, BoE Chief Economist Huw Pill warned on Tuesday that inflation could continue to prove stronger-than-expected, which might strengthen the need to maintain interest rates higher. “I remain concerned that we have seen a sort of structural change in price and wage-setting behaviour, maybe driven by the type of things that were involved in models of the inflation process from the ’70s and ’80s,” Pill said in a conference at the London School of Economics, Reuters reported.
Going forward, the major trigger for the Pound Sterling will be the preliminary UK Q1 Gross Domestic Product (GDP) and factory data, which will be released on Thursday. The UK economy is expected to have expanded by 0.6% in the first quarter of the year, faster than the 0.1% growth seen in the last quarter of 2024.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.34% | -0.22% | -0.93% | 0.00% | 0.04% | -0.10% | -0.40% | |
| EUR | 0.34% | 0.12% | -0.64% | 0.35% | 0.37% | 0.21% | -0.07% | |
| GBP | 0.22% | -0.12% | -0.76% | 0.22% | 0.24% | 0.09% | -0.19% | |
| JPY | 0.93% | 0.64% | 0.76% | 0.95% | 0.99% | 0.80% | 0.54% | |
| CAD | -0.01% | -0.35% | -0.22% | -0.95% | 0.03% | -0.13% | -0.41% | |
| AUD | -0.04% | -0.37% | -0.24% | -0.99% | -0.03% | -0.16% | -0.43% | |
| NZD | 0.10% | -0.21% | -0.09% | -0.80% | 0.13% | 0.16% | -0.27% | |
| CHF | 0.40% | 0.07% | 0.19% | -0.54% | 0.41% | 0.43% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Daily digest market movers: Pound Sterling outperforms US Dollar
- The Pound Sterling gains further to near 1.3350 against the US Dollar (USD) in Wednesday’s European session. The GBP/USD pair extends Tuesday’s recovery move as the US Dollar retraces further after the release of the softer-than-expected United States (US) on Wednesday. The GBP/USD pair returns above the 20-day Exponential Moving Average (EMA), which trades around 1.3255, suggesting that the trend has turned bullish again.
The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range. A fresh bullish momentum would appear if the RSI breaks above 60.00.
On the upside, the three-year high of 1.3445 will be a key hurdle for the pair. Looking down, the psychological level of 1.3000 will act as a major support area.