Ella 
In early Asian trading on Thursday, GBP/USD rose slightly. GBP/USD regained the 1.2700 mark on the back of risk-on sentiment. However, Thursday’s preliminary estimate of U.S. fourth-quarter (Q4) gross domestic product (GDP) could spark market volatility. As of press time, GBP/USD was trading at 1.2717, up 0.01% on the day.
On Wednesday, UK purchasing managers’ indexes (PMIs) for January were stronger than expected, with the manufacturing PMI rising to 47.3 from 46.2 and the services PMI climbing to 53.8 from 53.4. Finally, the S&P Global Composite Purchasing Managers’ Index rose to 52.5 from 52.1, its highest level in seven months.
Investors expect the Bank of England (BOE) to start a rate-cutting cycle at its August meeting. Markets have priced in 175 basis points of rate cuts over the cycle, reaching 4.50% by December 2024.
On the other hand, former St. Louis Federal Reserve (Fed) President James Bullard said on Tuesday that the central bank may start cutting interest rates as soon as March even if inflation does not reach its 2% target.
That said, important events in the United States this week may convince the Fed of its further monetary policy path. The preliminary value of U.S. fourth-quarter gross domestic product will be released today. Gross domestic product is expected to expand at an annual rate of 2.0% in the fourth quarter after recording a 4.9% increase in the previous quarter.
Additionally, the U.S. core personal consumption expenditures price index (Core PCE) for December will be released on Friday. Core PCE is expected to rise 0.2% monthly and 3.0% annually. These data will provide direction for the GBP/USD pair.
