GBP is likely to see a new rise today as market sentiment supports risk-sensitive assets. The GBP/USD currency pair is expected to continue its upward trend as investors believe that the policy divergence between the Federal Reserve (Fed) and the Bank of England (BoE) will not widen further, as both have taken adequate steps to maintain price stability.
 
The next actions regarding the Pound Sterling could be determined by the preliminary Gross Domestic Product (GDP) data for Q3 2023, set to be released this weekend. Economists predict a slight contraction in Q3 GDP due to UK companies reducing jobs and inventory levels amid weak demand.
 
Business investment is expected to remain low in the July-September quarter as firms delay capacity expansion plans to avoid higher borrowing costs.
 
Latest Market News: Pound Sterling Awaits UK Q3 GDP Data
 
  1. The Pound Sterling is poised to strengthen above the resistance level of 1.2400 with positive market sentiment, as hopes rise that the Federal Reserve (Fed) will not raise interest rates further.
  2. Market sentiment is improving, bolstering risk assets and forecasting further declines in the US Dollar.
  3. The GBP/USD pair reached a six-week high as weakness in the US labor market prompted a risk-on push.
  4. The strength of GBP/USD is driven by intensive selling of the US Dollar, but it may lose some gains after dollar-buying positions are unwound.
  5. The Pound Sterling rebounded after the BoE kept interest rates at 5.25% for the second consecutive time.
  6. The BoE's latest inflation forecast indicates a drop in consumer inflation to 4.6% by the end of the year. 
  7. UK Prime Minister Rishi Sunak pledged to reduce inflation to 5.4% by the end of 2023, down from 10.7% in January.
  8. The preliminary Q3 GDP data is the focus of this week, with economists predicting a 0.1% economic contraction compared to 0.2% growth in the previous quarter.
  9. The negative projection is based on weak demand conditions due to rising interest rates and the cost-of-living crisis.
  10. Business optimism has declined as interest rate hikes have forced companies to make significant cuts to jobs, purchases, and inventories.
  11. Risks have increased in the Middle East as Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire in a meeting with US Secretary of State Antony Blinken.
  12. Investors are also awaiting the Global S&P Construction PMI for October, with economic data dropping to 44.5 from 45.0 the previous month.
  13. The US Dollar Index (DXY) is vulnerable as the US economy feels the impact of the Fed's rate hikes, with a still-weak US labor market.
  14. The US Services PMI fell to 51.8, down from 53.6 in September, indicating a significant slowdown in service sector activity.
 
Warning!
 
This analysis is based on fundamental and technical perspectives from trusted sources and is not intended as advice or solicitation. Always remember that this content aims to enrich readers' information. Conduct independent research regarding other forex information to guide your trading decisions.
 
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