GBP/USD dropped 0.38% to 1.3224 as hawkish Fed remarks from Hammack and Goolsbee dampened sentiment, overshadowing in-line UK Q3 GDP growth of 0.7% and 75% market-implied odds of a further BoE rate hike.
GBP/USD has fallen for a third straight day to 1.3224 (-0.38%) as hawkish Fed commentary from Hammack and Goolsbee outweighs in-line UK Q3 GDP growth of 0.7%. Traders now price 75% odds of a further BoE hike, yet the pair still slides, and a daily close below 1.3221 support would open further downside. Friday's US PPI is the key risk event.
Hawkish comments from Cleveland Fed's Hammack and Chicago Fed's Goolsbee, who called inflation 'well above target' and 'not a one-off', lifted the Dollar across the board (up 0.27% vs EUR, 0.29% vs GBP). Upcoming remarks from Williams and Friday's PPI could reinforce the tightening case if higher.
Sterling fell against all majors except a mixed performance, down 0.29% against the Dollar and 0.33% against the Australian Dollar, its worst performer being the USD, as hawkish Fed rhetoric overshadowed in-line Q3 GDP growth of 0.7%. Even a BoE rate hike on November 5 and 75% priced odds of another hike have not stopped the slide.
The British Pound fell for a third consecutive day, trading at 1.3224 as hawkish commentary from Federal Reserve officials outweighed steady UK economic performance. Despite UK Q3 GDP growth of 0.7% matching expectations, investors focused on Fed warnings that inflation remains well above target, driving the US Dollar higher ahead of Friday's Producer Price Index release.
The 0.7% Q3 GDP print matched expectations, but hawkish comments from Fed officials fueled expectations of tighter US policy, and investors kept selling the Pound, driving GBP/USD to around 1.3224.
A softer-than-expected US PPI on Friday or a sustained break above the 1.3346 SMA cluster would ease the bearish bias; a daily close below 1.3221 would instead point to more weakness.
Fed officials Hammack and Goolsbee signalled the inflation outlook is worsening and that the hot inflation report was not a one-off, boosting expectations of a gradual but continued tight policy stance.
Comments from Chicago Fed's Goolsbee, NY Fed's Williams and other officials, plus Friday's Producer Price Index release.
Yes. UK GDP grew 0.7% in Q3, in line with estimates, but Sterling still fell for a third day as hawkish Fed comments and the prospect of tighter US policy dominated.
Against the US Dollar, down about 0.29%, with GBP/USD trading around 1.3224 near the 1.3200 level.