The Pound-Dollar could come under pressure if UK growth stalls, although softer US inflation may limit any sustained Dollar advance.
The Pound US Dollar (GBP/USD) exchange rate wavered sideways on Thursday as markets braced for high-impact UK and US data due on Friday.
At the time of writing, GBP/USD was trading at $1.3550, virtually unchanged on the day.
DAILY RECAP:
The Pound (GBP) remained subdued on Thursday, with the continued absence of fresh UK economic data keeping Sterling within a narrow range.
The upcoming UK GDP figures also appeared to limit movement in the Pound, as GBP investors seemed reluctant to adjust their positions ahead of the week’s key economic release.
Meanwhile, the US Dollar (USD) was also largely rangebound on Thursday with markets awaiting Friday’s US consumer price index.
The ‘Greenback’ was also kept confined to a tight range amid broader factors. A risk-off mood lent the safe-haven currency some support, while concerns about US trade and foreign policy undermined USD.
Near-Term GBP/USD Forecast: Flatlining UK Growth to Weigh on the Pound?
Looking ahead, GBP investors will be keeping a close eye on the latest UK GDP figures due on Friday.
Markets expect growth to have stalled in July. A weak start to the third quarter could put pressure on the Pound, as it would revive concerns over the health of the British economy and potentially temper expectations for interest rate hikes from the Bank of England (BoE).
Meanwhile, the latest US CPI is in focus for USD investors. Easing inflation in August could undermine the ‘Greenback’, while any signs that price pressures remain persistent could boost the currency.
Risk appetite may also continue to influence the pairing. If the mood remains risk-off, the safe-have US Dollar could attract support while the increasingly risk-sensitive Pound struggles.
Our currency coverage draws on live market data, official economic releases and published bank research.
