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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, fuelling speculation that the Federal Reserve (Fed) may cut interest rates sooner than expected. Market participants are currently awaiting further economic cues, including the Producer Price Index (PPI) data and weekly jobless claims, scheduled for release on Thursday.
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%. Year-on-year, core inflation fell to 2.8% from 3.0% and to 3.1% from 3.3%.
In the United Kingdom (UK), the latest RICS Housing Market Survey indicates a 11 per cent house price balance in February, marking the second consecutive decline. This figure was below market expectations of 20 per cent and down from January’s 21 per cent.
UK Prime Minister Keir Starmer has expressed optimism that the UK will be able to avoid US tariffs on steel and aluminium, stressing a ‘pragmatic approach’ in negotiations while keeping all options open. In contrast to 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 per cent, the highest level for two months, as expectations intensify 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 of 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 1.2940, SL 1.2990, TP 1.2860
Origin: FreshForex
