Ella 
In the Asian market on Thursday, GBP/USD continued its winning streak since the opening of last week, rising to around 1.2310. Despite strong US economic data, GBP/USD found upside support as the Fed minutes showed divergent views among Fed officials.
The Fed meeting minutes emphasized the importance of monetary policy relying on economic data. Some believe that a sharp rise in inflation is crucial for the Fed to reach a consensus to make monetary policy decisions.
In September, the U.S. Producer Price Index (PPI) rose, jumping from 2.0% to 2.2%, beating expectations by 1.6%. Market focus now turns to the Consumer Price Index (CPI) released on Thursday, predicting that annual inflation may fall to 3.6% from 3.7%. In addition, the market will also focus on the upcoming weekly jobless claims report.
After Fed officials released dovish remarks and a neutral stance, investors seemed to speculate that the Fed would give up the idea of raising interest rates. Federal Reserve Governor Christopher Waller advocated a cautious stance on interest rate developments, arguing that financial market tightening “can do some work for us.
Fed Governor Michelle Bowman, on the other hand, favors another rate hike, citing inflation continuing to run above the Fed’s 2% target. Disagreement over monetary policy within the Federal Reserve further complicates the current economic situation.
The U.S. Dollar Index (DXY) is facing a challenge, trying to hold around 105.70 at press time. The struggle has been attributed to weakness in U.S. Treasury yields, with the 10-year U.S. Treasury yield last at 4.57%.
Market participants are likely to keep a close eye on UK GDP and manufacturing data.
It is predicted that the UK’s GDP in August is expected to be 0.2%, an increase from the previous value of -0.5%; the manufacturing production in August is expected to be -0.4%, compared with the previous value of -0.8%.
Last week, the Bank of England lowered its forecast for third-quarter economic growth to 0.1% from 0.4%, with little sign of an inclination to raise interest rates further.
