GBP/USD Outlook: Pound Stays Above 1.3550 After UK Housing Data
The GBP/USD pair is moving slowly and trading just above 1.3550. This comes after UK housing data showed weakness. The RICS report said housing price balance fell to -19% in August, worse than both July’s -13% and the expected -10%. This means fewer people are buying homes and the market is slowing.
Traders believe the Bank of England will keep interest rates at 4% in September. Focus is also on the UK GDP report coming on Friday. Growth is expected to be very low, compared to the 0.4% rise in June. If the numbers are weak, people may think the BoE could cut rates later this year.
In the US, inflation is the key topic. The recent Producer Price Index (PPI) was weak, which makes traders expect the Federal Reserve may soon reduce rates. But the next Consumer Price Index (CPI) report is very important. If CPI is higher than expected, the Fed might even go for a bigger rate cut, maybe 50 basis points.
Impact:
GBP/USD might fall if UK GDP is weak or if US inflation is high. But if rate cut hopes increase, the pair could stay firm above 1.3550.
