Sterling struggles to gain momentum as robust US economic outlook and hawkish Fed commentary keep the US Dollar trending higher, overshadowing positive UK industrial output data.
Despite UK Q3 GDP rebounding 0.7% and September industrial output beating forecasts at 3.1% Y-o-Y, GBP/USD only edged up to 1.3260 from lows near 1.3250 and remains down 1.4% over three days. Fed tightening bets for December limit any Sterling recovery, with Rabobank noting USD-supportive factors and the article stating USD risk is skewed to the upside.
October US consumer inflation figures and comments from multiple Fed policymakers have boosted expectations of at least a 25 basis point hike at the December meeting. Rabobank notes reduced fears of political interference on the Fed support confidence in US monetary policy, and the article says USD risk is skewed to the upside.
Q3 GDP grew 0.7% after a revised 1% contraction in Q2, with Y-o-Y growth accelerating to 1.9% from 1.4%, and industrial output beat forecasts at 3.1% Y-o-Y. However, these figures merely met or only slightly beat expectations, and the Pound's broader bearish trend remains intact with a 1.4% decline over three days.
The British Pound remains under pressure despite UK Q3 GDP growth of 0.7% and industrial production rising 3.1% Y-o-Y. While the data met or slightly exceeded expectations, the GBP/USD pair is down 1.4% over three days as markets price in a potential December Federal Reserve rate hike of at least 25 basis points.
The GDP and industrial production figures met or beat expectations, but expectations of a Federal Reserve rate hike in December keep the US Dollar strong, leaving GBP/USD depressed around 1.3260 after a 1.4% three-day decline.
October consumer inflation data and hawkish comments from Fed policymakers have raised expectations of a rate hike of at least 25 basis points at the December meeting, which the article says skews USD risk to the upside.
No. GDP met expectations at 1.9% Y-o-Y and industrial production beat slightly, but the Pound only edged up marginally and its broader bearish trend is described as practically intact after a 1.4% drop in three days.