Ella 
In early Asian trading on Wednesday, GBP/USD fell to 1.2620. GBP/USD talks about the key 100-day exponential moving average (EMA). Amid a bumpy road to inflation, many Federal Reserve (Fed) policymakers are sticking to their rate-cutting path, with three rate cuts expected in 2024, which could weigh on the dollar. Gross domestic product (GDP) data for the US and UK will be released on Thursday.
Despite the recent rise in inflation month over month, Federal Reserve Chairman Jerome Powell said last week that price pressures will continue to ease and a rate cut later this year may be appropriate. Most U.S. central bank officials expect three rate cuts in 2024. In recent trading days, these comments have pushed the Fed’s stance to become more dovish, pushing the dollar lower.
In terms of data, the U.S. Conference Board consumer confidence index fell to 104.7 in February from a revised 104.8. Meanwhile, durable goods orders in February were better than market expectations, rising by 1.4% in February from a 6.9% decline in January. The U.S. dollar index consolidated around 104.30 after the release of U.S. economic data, with traders awaiting fresh clues from Friday’s U.S. PCE price index for February.
On the other hand, Catherine Mann, one of the most hawkish policymakers at the Bank of England (BOE), warned that financial market expectations for an interest rate cut this year are too high and that the Bank of England is unlikely to take action before the Fed. Traders will take more clues from Thursday’s UK gross domestic product (GDP) growth data, which is expected to contract at a 0.3% quarterly rate in the fourth quarter and an annualized rate of 0.2%. If GDP growth data comes in stronger than expected, Pound Sterling (GBP) could gain momentum and make GBP/USD bullish.
