The Pound Sterling (GBP) finds a cushion above the round-level support of 1.2600 against the US Dollar (USD) in ThursdayÂ’s London session. The GBP/USD pair gauges ground as the US Dollar registers a modest correction. The US Dollar Index (DXY), which tracks the GreenbackÂ’s value against six major currencies, edges down after posting a fresh eight-week high near 106.10.
However, the near-term outlook of the US Dollar remains firm as investors are expected to trade cautiously ahead of the United States (US) core Personal Consumption Expenditure price index (PCE) data for May, which will be published on Friday. Core PCE inflation, the Federal ReserveÂ’s (Fed) preferred inflation measure, is estimated to grow at a slower pace of 0.1% against 0.2% in April month-on-month. Annually, the underlying inflation is projected to decelerate to 2.6% from 2.8% in April.
A scenario in which PCE inflation declines, as economists expect, would boost expectations for the Fed to begin reducing interest rates from September. According to the CME FedWatch tool, traders see a 62.3% that interest rates will be reduced from their current levels. The tool also shows that the Fed will cut interest rates twice this year. However, Fed policymakers signaled in their latest dot plot that there will be only on rate cut this year.
In ThursdayÂ’s session, investors will focus on the Initial Jobless Claims data for the week ending June 21, the revised Q1 Gross Domestic Product (GDP) estimates, and Durable Goods Orders data for May.
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
 | GBP | USD | EUR | JPY | CAD | AUD | NZD | CHF |
---|---|---|---|---|---|---|---|---|
GBP | Â | 0.16% | 0.03% | -0.02% | 0.06% | -0.11% | -0.01% | 0.11% |
USD | -0.16% | Â | -0.13% | -0.21% | -0.11% | -0.30% | -0.19% | -0.05% |
EUR | -0.03% | 0.13% | Â | -0.10% | 0.00% | -0.17% | -0.09% | 0.06% |
JPY | 0.02% | 0.21% | 0.10% | Â | 0.12% | -0.08% | -0.00% | 0.17% |
CAD | -0.06% | 0.11% | -0.01% | -0.12% | Â | -0.21% | -0.09% | 0.04% |
AUD | 0.11% | 0.30% | 0.17% | 0.08% | 0.21% | Â | 0.11% | 0.22% |
NZD | 0.01% | 0.19% | 0.09% | 0.00% | 0.09% | -0.11% | Â | 0.13% |
CHF | -0.11% | 0.05% | -0.06% | -0.17% | -0.04% | -0.22% | -0.13% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The Pound Sterling finds interim support near 1.2600 against the US Dollar. The GBP/USD pair has come under pressure after breaking below the crucial support of 1.2700. The Cable declines toward the 200-day Exponential Moving Average (EMA), which trades around 1.2590.Â
The Cable has dropped below the 61.8% Fibonacci retracement support at 1.2667, plotted from the March 8 high of 1.2900 to the April 22 low at 1.2300.
The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating consolidation ahead.
The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
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