- GBP trades in a positive territory for the third consecutive week under 1.2700.
- US economy grew to 5.2% in Q3 from the previous reading of 4.9%, above the market consensus of 5.0%.
- BoE Governor Bailey said the central bank will do what it takes to bring inflation down to its 2% target.
- US Core PCE inflation data will be closely monitored by traders.
The GBP/USD pair attracts some buyers below the 1.2700 psychological mark during the early Asian session on Thursday. That being said, the softer US Dollar (USD) offers some support to the major pair. At press time, GBP/USD is trading near 1.2695, up 0.02% on the day.
The US Bureau of Economic Analysis (BEA) revealed on Thursday that the US economy grew to 5.2% in the third quarter (Q3) from the previous reading of 4.9%, above the market consensus of 5.0%. Federal Reserve (Fed) Governor Michelle Bowman said he sought to keep alive the possibility of more rate hikes, raising concerns about the longevity of inflationary pressure. Earlier this week, Fed Governor Christopher Waller stated that the Fed does not need to hike rates further from here.
Despite the mixed labor market and cooling inflation, investors will take more cues from the Core Personal Consumption Expenditure Price Index (PCE) for October. The monthly and annual Core PCE is expected to ease to 0.2% and 3.5%, respectively. These figures could convince the Fed of the coming Fed decisions.
On the UK’s front, Bank of England (BoE) Governor Andrew Bailey said on Wednesday that the central bank will do what it takes to bring inflation down to its 2% target, adding that the central bank has not seen the progress yet to be confident.
Looking ahead, traders will closely monitor the Core PCE inflation data, due later on Thursday. Additionally, the US weekly Jobless Claims, the Chicago PMI, and Pending Home Sales will be released. In the absence of top-tier economic data released from the UK docket, the GBP/USD pair remains at the mercy of USD price dynamics.
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