The GBP/USD pair continues to face downward pressure on Thursday, dipping to around 1.2660 during the Asian trading session as the US Dollar (USD) advances. The USD strengthened following the latest US inflation report, which showed robust growth in consumer spending for October but also highlighted stagnation in efforts to lower inflation, keeping the Federal Reserve (Fed) cautious.
The US Personal Consumption Expenditures (PCE) Price Index rose 2.3% year-over-year in October, up from 2.1% in September. The core PCE, which excludes food and energy prices, climbed 2.8%, slightly exceeding the previous month’s 2.7%. Additionally, US Gross Domestic Product (GDP) grew by a solid 2.8% for the third quarter, in line with expectations.
UK Economic Data Light, BoE Focus Intensifies
Meanwhile, economic data remains sparse for the United Kingdom (UK), with a similarly quiet calendar expected in the coming week. This leaves the Pound largely influenced by market expectations surrounding the Bank of England’s (BoE) interest rate decision in December.
BoE Deputy Governor Clare Lombardelli, speaking at King’s Business School on Monday, stressed the need for clearer signs of easing inflationary pressures before supporting further rate cuts. Lombardelli also warned that inflation remaining above the BoE’s target, particularly with wage growth stabilizing at 3.5%-4.0% and the Consumer Price Index (CPI) hovering around 3%, could present significant challenges for the central bank.
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