19 December 2024, GBP/USD
Event to watch out for today:
14:00 EET. GBP - Bank of England Key Interest Rate Decision
15:30 EET. USD - Unemployment Claims
GBPUSD:
The Pound-Dollar pair is strengthening after dropping more than 1% following the hawkish decision by the Federal Reserve (Fed) on Wednesday and is trading near 1.2590 in Asian hours on Thursday. The Pound Sterling (GBP) is receiving upward support as the Bank of England (BoE) is expected to leave interest rates unchanged later in the day, while maintaining focus on addressing elevated domestic inflation.
On Wednesday, data emerged that the U.K. Consumer Price Index (CPI) rose 2.6% year-over-year in November after rising 2.3% in October. The core CPI, which excludes volatile food and energy, rose 3.5% year-on-year in November, up from a previous increase of 3.3%. Meanwhile, annualized services inflation remained at 5%, below the forecast of 5.1% but above the Bank of England's estimate of 4.9%.
GBP/USD declined on the back of a stronger US Dollar as the Federal Reserve (Fed) decided to cut rates by 25 basis points (bps) at its December meeting on Wednesday, bringing the benchmark lending rate to a range of 4.25%-4.50%, a two-year low. On Thursday, traders will be watching for weekly data on initial jobless claims, existing home sales and the final annualized third quarter (Q3) gross domestic product.
Trading recommendation: Watch the level of 1.2600, if the level is fixed above consider Buy positions, if the level rebounds consider Sell positions.
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