UK growth figures are next for a Pound at a three-week low

Third-quarter Gross Domestic Product (GDP) on Thursday is forecast to show the UK economy growing faster, and GBP/USD goes into it at its lowest since mid-October. It has fallen for two sessions in a row, from just under 1.3450 at the start of Tuesday to just under 1.3300, and it's trading near the bottom of Wednesday's range.

US consumer prices rose 0.4% in October, more than forecast, and Fed Governor Waller told a Bank of England (BoE) conference in London on Tuesday that a December hike is likely. Traders put a quarter-point Fed hike on December 9 near 90%. That would take the top of the Fed's rate to 4.25%, above the UK's Bank Rate at 4.00%, eight days before the BoE next meets.

The BoE raised the Bank Rate on November 5 in an 8-1 vote, its first hike in more than three years, and GBP/USD has fallen in four of the five sessions since. BoE external member Greene told the Financial Times on Wednesday that UK wage growth is too high and that tightening proactively is appropriate. That's a case for a second hike, made with GBP/USD well below where it was trading before the first.

On the calendar

The Office for National Statistics publishes third-quarter GDP at 07:00 GMT on Thursday, forecast up 0.7% on the quarter after 0.5% and up 1.9% on the year after 1.4%. September's monthly figure is forecast flat after 0.1%, and industrial production is forecast down 0.3% after a 0.8% rise. All of it feeds the BoE's December 17 decision, the UK side of the rate gap.

US jobless claims follow at 13:30 GMT on Thursday, forecast at 195K after 189K, and six Fed officials speak the same day, starting with Cleveland Fed President Hammack at 14:00 GMT. October producer prices are due at 13:30 GMT on Friday, forecast up 0.4% after 1.3%, the last inflation figure of the week before the Fed's December 8-9 meeting.

On the charts

The climb from the October 14 low near 1.3150 topped out at 1.3500 on November 4 and 5, and GBP/USD has since given back about three fifths of it. That puts it back at the top of the 1.3200-1.3300 band it traded in through the first half of October, before the rally began.

GBP/USD daily chart