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GBPUSD:
The GBP/USD pair is attempting to continue rising for the third consecutive day, trading near 1.2960 during the Asian session on Thursday. The GBP/USD pair is rising as the US dollar (USD) faces headwinds amid continued tariff uncertainty from US President Donald Trump and growing fears of a possible recession in the US.
The US Dollar could lose further ground as US inflation fell more than expected in February, sparking speculation that the Federal Reserve (Fed) may cut interest rates sooner than expected. Market participants are currently awaiting Producer Price Index (PPI) data and weekly jobless claims on Thursday for further economic cues.
US monthly core inflation slowed to 0.2% in February from 0.5% in January, while core inflation eased to 0.2%, below the forecast of 0.3%. On an annualized basis, core inflation eased to 2.8% from 3.0% and core inflation fell to 3.1% from 3.3%.
In the United Kingdom (UK), according to the latest RICS Housing Market Survey, the house price balance fell to 11% in February, the second consecutive decline. The figure was below market expectations of 20% and down from January’s 21%.
UK Prime Minister Keir Starmer expressed optimism that the UK will be able to avoid US tariffs on steel and aluminum, stressing a “pragmatic approach” in negotiations while keeping all options open. Unlike the European Union (EU), which has announced immediate retaliation to Trump’s tariffs, the UK has reiterated its commitment to trade talks with the United States (US).
Meanwhile, the yield on 10-year UK gilts rose to 4.68%, the highest level in two months, as expectations intensified that the Bank of England (BoE) will maintain higher interest rates for an extended period of time. Traders now expect the rate to be cut by just 52 basis points (bps) in 2025, cutting previous forecasts for more aggressive easing. Investors are now awaiting Friday’s UK GDP data for January, which could provide further insight into the country’s economic outlook.
Trading recommendation: SELL 1.3000, SL 1.3040, TP 1.2870
Origin: FreshForex
