GBP Edges Higher on Softening US Dollar Ahead of Key UK Data
The Pound edged higher against the US Dollar in early Asian hours on Thursday as the US Dollar softened. This move comes after the release of July US Consumer Price Index (CPI) data, which showed a 3.4% year-over-year increase and a 2.5% core CPI rise. These figures tempered expectations for a September Federal Reserve rate hike, with traders further reducing the perceived probability to 40%, according to the CME FedWatch tool.
The UK's second-quarter GDP, along with trade and industrial production data, are set to be released later in the session. Analysts at Scotiabank highlighted the importance of these releases, stating that they would act as a significant driver for Pound price action. The preliminary estimate of UK Q2 GDP is expected to show a 0.4% quarter-on-quarter expansion.
The technical picture for GBP/USD remains bullish, with the pair trading above its 100-day simple moving average and the Bollinger Bands middle line. This configuration suggests that upward momentum is still in place, although traders are cautious given the softer US inflation data.