- GBP/USD is getting ground after the release of higher-than-expected UK GDP information on Friday.
- The Pound Sterling might come across difficulties on a rate cut possibility by the BoE next month.
- United States Treasury yields lost ground after the release of weak United States Initial Jobless Claims on Thursday.
GBP/USD edged greater to near 1.2540 throughout Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) information for the very first quarter. GDP (QoQ) increased by 0.6%, reversing the previous quarter’s decrease of 0.3%, exceeding expectations of a 0.4% boost. In Addition, GDP (YoY) increased by 0.2%, rebounding from the previous decrease of 0.2%.
The Pound Sterling (GBP) experienced obstacles following the Bank of England’s (BoE) choice to preserve the rate of interest at 5.25% on Thursday. Reuters reported that BoE Guv Andrew Bailey pointed out throughout the post-decision interview that “a rate cut next month was a possibility,” however he plans to wait on inflation, activity, and labor market information before choosing. This has actually raised the possibility of future rate cuts, putting pressure on the British Pound and deteriorating the GBP/USD set.
Consequently, the United States Bureau of Labor Statistics (BLS) launched information showing that the variety of people applying for welfare exceeded expectations. Preliminary Unemployed Claims for the week ending May 3 increased to 231,000, going beyond price quotes of 210,000 and revealing a boost from the previous week’s reading of 209,000. This recommends a prospective shift towards a less hawkish policy outlook by the Federal Reserve (Fed), leading to pressure on United States Treasury yields and weakening the United States Dollar (USD).
On Friday, the initial Michigan Consumer Sentiment Index is anticipated to reveal a small decline in May. This index is a study that assesses belief amongst United States customers, including 3 main locations: individual financial resources, company conditions, and purchasing conditions.
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