GBP/USD edges higher ahead of key UK GDP, US PPI data

The Bank of England may be facing a deadline for its first rate decrease because of a possible faster pace of decline in inflation, which is why the GBP/USD pair is trading strongly for the third day in a row.

The US CPI inflation data could put the Federal Reserve’s intentions to lower interest rates this year in jeopardy. The US Producer Price Index and November’s monthly GDP growth statistics are being watched carefully by traders.

The UK GDP is predicted to increase by 0.2% MoM from the previous estimate. The GBP/USD exchange rate is now up 0.16% on the day, trading close to 1.2780. Although the BOE has predicted a difficult battle to return inflation to its objective of 2%, a drop in energy prices may cause inflation to reduce more quickly than anticipated.

December saw a higher-than-expected increase in the US Consumer Price Index (CPI), with the Core CPI reaching 3.9% YoY and exceeding the market expectation of 3.8%. The UK Manufacturing Production, Industrial Production, and monthly GDP for November will all be eagerly watched by market participants who are also awaiting comments and remarks by Fed’s Neel Kashkari.