- GBP/USD remains silent as the UK RICS Housing Price Balance declined to -19% in August.
- The US Dollar may lose ground as softer PPI boosts Fed easing prospects for September.
- Stronger August US Consumer Price Index data may increase the odds for a bumper Fed rate cut next week.
GBP/USD moves little for the second successive day, trading around 1.3520 during the Asian hours on Thursday. The pair holds steady after the United Kingdom’s (UK) RICS Housing Price Balance fell to -19% in August, its weakest level in nearly two years, down from -13% in July, as subdued buyer demand continues to pressure prices. The reading was worse than expected -10 reading for the same period.
The Pound Sterling (GBP) may hold its ground against its peers as traders expect the Bank of England (BoE) to hold interest rates steady at 4% in the monetary policy meeting in September. The upcoming UK GDP data, due Friday, is anticipated to reveal stagnant monthly growth following June’s 0.4% increase. Evidence of slowing economic momentum could reinforce market expectations for additional BoE rate cuts later this year.
The US Dollar (USD) could face challenges as the CME FedWatch tool suggests that markets are now fully pricing in a 25 basis points (bps) rate cut at the Fed’s September meeting, following softer-than-estimated US Producer Price Index (PPI) data.
Traders now turn to the August US Consumer Price Index (CPI), due later today, which could strengthen expectations for a larger 50-basis-point Fed rate cut next week. The headline CPI is forecasted to rise by 2.9% YoY in August, while the core CPI is projected to increase 3.1% YoY during the same period.
