The GBP/USD pair continues to face pressure, holding losses for the third consecutive day, trading around 1.2660 during Friday’s Asian session. The British Pound (GBP) has been undermined by rising US Dollar (USD) strength, largely driven by potential tariff threats from the Trump administration and stronger-than-expected US inflation data.
The US Dollar received a further boost on Thursday with the release of the US Producer Price Index (PPI), which surged 0.4% month-over-month in November, the largest increase since June, following a revised 0.3% gain in October. This was well above the 0.2% anticipated by analysts, adding upward pressure on the USD and contributing to the GBP/USD’s downward movement.
Looking ahead, traders are awaiting the US Federal Reserve’s interest rate decision scheduled for next week, with markets fully pricing in a 25 basis point rate cut on December 18, according to the CME FedWatch Tool.
In the UK, attention is turning to the release of the monthly Gross Domestic Product (GDP) figures and October’s factory data, both due on Friday. These reports will provide important insights into the health of the UK economy.
Despite the ongoing downside pressure on the Pound, the risks of a significant decline appear limited. This is partly due to rising expectations that the Bank of England (BoE) will adopt a more gradual pace of policy easing compared to other central banks in Europe and North America.
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