The GBP/USD currency pair has been on an upward trend for the third straight week, remaining positive despite having tested 1.2400 earlier in the day. The pair has since edged lower, but the overall upbeat mood persists.
Soft PCE Inflation Data Limits US Dollar Strength
The recent performance of GBP/USD can be attributed to soft PCE inflation data from the US, which is making it difficult for the US Dollar to gather strength. The PCE inflation data measures the changes in prices of goods and services in the US, and the latest data shows a decline in inflation, which is a positive sign for the economy.
This soft inflation data has caused investors to lower their expectations of an interest rate hike by the Federal Reserve, as lower inflation rates mean less pressure to increase rates. This has led to a decrease in demand for the US Dollar and a subsequent increase in demand for other currencies, such as the GBP.
GBP/USD Remains Positive for Third Straight Week
Despite testing 1.2400 earlier in the day, the GBP/USD pair remains on track to end the third straight week in positive territory. This positive trend can be attributed to several factors, including the soft PCE inflation data from the US and positive economic data from the UK.
The UK economy has shown signs of improvement, with recent data showing an increase in manufacturing and services activity. Additionally, the UK government has announced plans to ease lockdown restrictions, which could further boost economic growth.
Outlook for GBP/USD Pair
Looking ahead, the outlook for the GBP/USD pair remains positive, with several factors expected to support its upward trend. The soft PCE inflation data from the US and positive economic data from the UK are expected to continue to drive demand for the GBP and limit the strength of the US Dollar.
Additionally, geopolitical events, such as Brexit negotiations and trade tensions between the US and China, could also impact the pair’s value in the coming weeks.
In conclusion, the GBP/USD pair has remained positive despite testing 1.2400 earlier in the day. The soft PCE inflation data from the US and positive economic data from the UK are expected to continue to support the pair’s upward trend in the coming weeks. While there are several factors that could impact its value, the overall outlook for the pair remains positive.