GBP/USD hovers around 1.2200 post recent losses on upbeat US data

• GBP/USD recovers from losses registered after optimistic US economic readings.
• US headline inflation surpassed the expectations; while jobless claims printed a lower reading than expected.
• The recent downbeat UK data might have put pressure on the Pound Sterling.

GBP/USD retraces the recent losses that were registered on Thursday, trading higher around the 1.2200 psychological level. However, the pair faced challenges due to the optimistic economic data from the United States (US).

The Consumer Price Index (CPI) in the US, as revealed by the US Bureau of Labor Statistics (BLS), exceeded expectations in September, with annual figures expanding consistently at a rate of 3.7%, slightly surpassing the estimated 3.6%.

Furthermore, the Initial Jobless Claims for the week ending on October 6 exhibited a nuanced trend. Despite a modest increase of 209K, the figure was slightly below the forecast of 210K, indicating a subtle easing.

On Thursday, the data showed that the US Producer Price Index (PPI) surged in September on a yearly basis, jumping from 2.0% to 2.2%, Core PPI climbed to 2.7% from the anticipated easing to 2.3%.

Discussions are stirred about the trajectory of the Federal Reserve's (Fed) monetary policy following the slew of upbeat economic data during this week.

Additionally, UK economic data failed to instill confidence in the Pound Sterling (GBP) on Thursday. The Manufacturing and Industrial Production figures fell short of expectations, with Manufacturing Production declining by 0.8% in August, missing the forecast of 0.4% decline, swinging from the previous month's dip of 1.2%.

Industrial Production for the same period missed estimates, registering a decline of 0.7% instead of the anticipated 0.2% decline. The prior reading was revised at a 1.1%  decline. Although UK Gross Domestic Product (GDP) for August met expectations at 0.2%, the previous month was revised to 0.6% decline. It's a mixed bag of economic indicators, that failed to impact the sentiment around the British Pound.

During the previous week, the Bank of England (BoE) revised its growth forecast for the July-September period from 0.4% to a mere 0.1%, providing little indication of any inclination to pursue further rate increases.

Market participants will likely monitor the US Michigan Consumer Sentiment Index and BoE's Governor Andrew Bailey’s speech on Friday for further indications on economic scenarios in both countries.