Ella 
GBP/USD attracted some bargain hunting during Thursday’s Asian session and reversed some of the losses seen the day before as it pulled back from near its monthly peak following the release of US CPI. Spot prices are currently trading around the 1.2735-1.2740 range, with an intraday increase of less than 0.10%. Traders currently expect the release of the preliminary value of UK third-quarter gross domestic product (GDP) to bring new impetus.
Consensus estimates show the UK economy grew by 0.6% between April and June, down slightly from 0.7% in the previous quarter. Meanwhile, annualized UK GDP growth is forecast at 0.9%, compared with 0.3% in the first quarter. Even faster GDP growth, against the backdrop of an unexpected fall in UK unemployment, would signal a strengthening economy. This could complicate the Bank of England’s (BOE) interest rate cut plans and be bullish for the pound (GBP).
Beyond that, investors will also be watching U.S. macro data on Thursday – monthly retail sales, the usual weekly jobless claims numbers, the Empire State Manufacturing Index and the Philadelphia Fed Manufacturing Index. These data could influence USD price dynamics and provide some meaningful impetus to the GBP/USD pair. Ahead of the release of key data, bets that the Federal Reserve (FED) is about to start a rate-cutting cycle weighed on the dollar and provided support for the currency pair as data showed that inflation was trending downward.
The U.S. Bureau of Labor Statistics (BLS) released a report on Wednesday saying that the overall U.S. CPI rose modestly by 0.2% month-on-month in July, compared with a 0.1% decrease last month. At the same time, the annual growth rate of CPI slowed slightly, falling below 3% for the first time in nearly three and a half years, indicating that the Fed continues to make progress in achieving its inflation target. However, investors have scaled back their expectations for more aggressive policy easing from the Federal Reserve, which, coupled with geopolitical risks, could help limit the downside for GBP/USD and weigh on the GBP/USD exchange rate.
