⬆️ EURGBP) BULLISH) analysis) ⬆️⬆️hello trader’s what do you think about Eurgbp)?
The pound rose slightly on Friday as the dollar slipped while investors waited for data on the Federal Reserve's preferred gauge of inflation.
Sterling
GBPUSD
was up 0.36% at $1.2736 and was set for a weekly gain of 0.45%. The euro
EURUSD
was down 0.26% against the pound at 86.55 pence.
The pound has risen for five of the last six weeks against the dollar as investors have ramped up bets that the Fed will cut interest rates sharply next year after consumer price index inflation slowed to 3.1% in November.
The November personal consumption expenditure (PCE) index, the Fed's favoured measure of price pressures, is due at 1330 GMT on Friday.
Data on Friday showed the UK economy shrank 0.1% in the third quarter of the year.
Yet FX investors may have been paying more attention to separate figures that showed British retail sales jumped 1.3% in November, more than expected.
"Today’s release provided some festive cheer for retailers," said Alex Kerr, assistant economist at Capital Economics.
"But with higher interest rates still percolating throughout the economy, we doubt that there will be a continued rise in sales volumes early next year."
In their 2024 outlooks, many strategists tipped the pound for a solid year on the basis the Bank of England would not be able to cut interest rates as much as the Fed or European Central Bank, making British bond yields more attractive.
That idea was called into question earlier this week when data showed that UK inflation slowed to 3.9% in November, more than expected, from 4.6% in October.
Investors think the BoE is likely to cut rates by 140 basis points next year, according to pricing in derivatives markets, up from about 120 bps at the start of the week.
The dollar index
DXY
, which tracks the currency against six major peers, was last down 0.22% on Friday at 101.55.
