GBP/USD remains on the defensive below 1.2550 following UK GDP data
- GBP/USD trades on a softer note around 1.2530 following UK GDP numbers on Friday.
- UK monthly Gross Domestic Product (GDP) grew 0.1% MoM in February vs. the 0.1% expected.
- The lower speculation of Fed rate cuts this year lifts the Greenback and weighs on the pair.
The GBP/USD pair remains on the defensive near 1.2530 during the early European trading hours on Friday. The major pair remains vulnerable despite the stronger-than-expected UK monthly GDP numbers and improved Industrial Production data.
The latest data released from the Office for National Statistics on Friday showed that the UK monthly Gross Domestic Product (GDP) grew 0.1% MoM in February, compared to an expansion of 0.3% in the previous reading, matching the estimation of a 0.1% expansion. Additionally, UK Industrial Production for February came in better than the market expectation, improving to 1.1% MoM from a 0.3% decline in January. Finally, the UK Goods Trade Balance arrived at GBP-14.212 billion MoM in February from GBP-14.097 billion prior, better than GBP-14.5B expected. The upbeat UK economic data failed to boost the Pound Sterling (GBP) as the markets anticipate the Bank of England (BoE) will cut its interest rate sooner than the US Federal Reserve (Fed).
On the other hand, the recent hotter-than-expected CPI inflation reading and stronger Nonfarm Payrolls (NFP) trigger speculation that the Fed will have to push back the number and timing of interest rate cuts this year. This, in turn, provides some support to the Greenback and creates a headwind for the GBP/USD pair. Investors will take more cues from the preliminary US Michigan Consumer Sentiment Index for April, along with the Fed's Bostic and Daly speeches later on Friday.