Ella 
GBP/USD remains below the mid-1.2600 level during early Asian trade on Thursday. Weaker-than-expected UK inflation data and a slight recovery in the US dollar supported the pair’s losses. At press time, the currency was trading at 1.2638, up 0.08% on the day.
U.S. consumers were more optimistic about the U.S. economy in December. The U.S. CB Consumer Confidence Index rose to 110.7 from 101.0 previously (downgraded from 102.0). Additionally, existing home sales in November came in at an annual rate of 3.82 million units, above the consensus estimate of 3.77 million units.
The Federal Reserve (Fed) struck a dovish tone after last week’s interest rate meeting, with rates expected to be cut by 75 basis points (bps) in 2024 as inflationary pressures cool. However, traders will get more clues from this week’s economic data, including U.S. third-quarter gross domestic product (GDP) growth data and the core PCE price index, the Fed’s preferred inflation gauge. Weaker-than-expected data could drag USD/GBP lower.
In the UK, the consumer price index (CPI) in November was lower than market expectations, with a monthly rate of 0.2%, down from 0% in the previous month, and below expectations of 0.1%. On an annualized basis, CPI climbed to 3.9% from 4.6% last time, missing expectations of 4.4%. Finally, core CPI, which excludes volatile food and energy prices, rose to 5.1% in November from 5.7% in October, below the market consensus of 5.6%. Downturn in UK inflation data has put some selling pressure on the pound and is negative for the GBP/USD currency pair.
Next up, the UK is due to release public borrowing data for November. In addition, third-quarter gross domestic product (GDP), weekly jobless claims and the Philadelphia Fed manufacturing survey will be released later on Thursday.
