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As US Q1 GDP Looms, GBP/USD Investors Take a Respite Below 1.2500
GBP/USD accepts offers to pare the largest daily gain in three weeks, and has recently printed modest losses. Inconsistent sentiment, concerns over a U.S. default, and generally optimistic U.S. data permit Cable to retreat. The US Dollar struggles for direction amidst a cautious mood preceding the US GDP report for the first quarter and a volatile market elsewhere.
GBP/USD struggles to defend yesterday's gains, the largest in three weeks, as US Dollar purchasers become cautious ahead of the crucial US Q1 GDP report. Nevertheless, the British pound remains moderately offered around 1.2465 on Thursday morning.
The markets become volatile as traders take a respite after a volatile day, particularly in light of contradictory news and a cautious mood preceding crucial US growth data.
The US House of Representatives passes a bill that enables the government to negotiate the extension of the debt ceiling while discussing the major risk factors. As a result of the substantial disparity between Republican and Democratic demands, policymakers are likely to continue to disagree. In the same vein, Goldman Sachs (GS) believes that the US Treasury Department can avoid the danger of a federal payments default until late July, based on the most recent tax receipts data.
On a separate tab, British policymakers criticize sections of the illegal migration measure and the Brexit initiative of the Conservative government. Additionally confronting the GBP/USD pair could be the political turmoil that ethically challenges UK Prime Minister Rishi Sunak.
Notably, as US Durable Goods Orders rose, but Consumer Confidence decreased, the GBP/USD pair was negatively impacted by a combination of contradictory US data and equity market performance. In addition, the tech titans enabled the Nasdaq to maintain its strength, but First Republic Bank (FRB)'s escalating concerns, as evidenced by a 20% share price decline on Wednesday following a 50% decline the day before, weigh on sentiment.
In the midst of these moves, US Treasury bond yields remain directionless, while S&P 500 Futures post modest gains of 0.20 percent around 4,083 at press time, following Wall Street's muddled close.
Moving forward, GBP/USD may experience further deterioration as markets become volatile ahead of the crucial US first quarter (Q1) Gross Domestic Product (GDP), which is anticipated to decline to 2.0% on an annualized basis from 2.5% previously. However, Cable purchasers are likely running out of steam, so any positive US data surprise could allow bears to enter the market.
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