The GBP/USD pair is trading flatly at 1.2622 in the early Asian session of Friday.

• In Q42023, the UK GDP shrank by 0.3% QoQ, according to early data.
• Compared to the prior estimate of 3.2%, the final US Q4 GDP rose by 3.4%, which is above expectations.
• The main event on Friday will be the US February Core PCE.

The GBP/USD pair traded sideways around 1.2622 in the early Asian session on Friday. On Good Friday, the market will probably be quiet with little trade. The US Core Personal Consumption Expenditures (PCE) Price Index is scheduled to be announced later today. The preferred inflation indicator used by the Fed is predicted to stay steady at 2.8% YoY.

Following the release of economic statistics indicating that the UK economy entered a recession in the second half of 2023, selling pressure on the pound sterling (GBP) has not decreased. In the fourth quarter, the country’s GDP shrank by 0.3% quarter over quarter, according to early estimates. The GDP figures, however, had little effect on expectations for monetary policy because investors had already priced in a slight recession by the end of last year.

The GBP is also weakened by increased rumors that the Bank of England (BoE) may start reducing interest rates by three-quarter points this year. In upcoming BoE policy meetings, interest rate reductions are “in play,” according to Governor Andrew Bailey.

However, the US economy was steady in the previous year’s fourth quarter. As a result, the Greenback gains some support, and the GBP/USD pair declines. Surpassing the initial 3.2% forecast, the final US Q4 GDP growth rate was 3.4%. In the meantime, the weekly initial claims for unemployment decreased to 210K from 212K to 210K for the week that concluded on March 22. Ultimately, an upward revision to the March Michigan Consumer Sentiment Index brought it over the earlier estimate of 76.5 to 79.4.