Wed. Jun 19th, 2024

GBP/USD CLINGS TO MILD LOSSES BELOW 1.2700 AHEAD OF US CPI DATA

By Mahesh Limbani Apr 9, 2024 #cpi #GBP/USD

GBP/USD trades with mild losses around 1.2675 on the consolidation of USD.

The UK’s OBR forecasts the UK economy to grow by 0.8% this year as domestic demand has rebounded.

The GBP/USD pair trades with a mild negative bias near 1.2675 during the early Asian session on Wednesday. The USD Index (DXY) consolidates just above the 104.00 yardstick amid the cautious mood. Investors await the US Consumer Price Index (CPI) inflation data, along with the speech of Fed’s Bowman and Goolsbee later in the day. 

Some Federal Reserve (Fed) officials offered their hawkish language. Chicago Fed President Austan Goolsbee said on Monday that the recent jobs report was “quite strong”, but the central bank must weigh how much longer it can maintain its current interest rate stance without damaging the economy. Meanwhile, Minneapolis Fed President Neel Kashkari said that the labor market is no longer ‘red hot’ but remains tight. He said his base case is that inflation continues to ease.  

Financial markets have priced in close to 57% of a rate cut in June, while the chance of a July cut has fallen below 75%, according to the CME FedWatch Tool. All eyes will be on the US March CPI data as it might help the Fed to determine the path of monetary policy after the figure showed an increase of 3.2% YoY last month. The signs of persistent inflation and robust growth in the US might boost the Greenback in the near term.  

On the other hand, the latest forecast from the UK Office for Budget Responsibility (OBR) suggested the UK economy is forecast to grow by 0.8% this year as domestic demand has recovered. The nation’s monthly Gross Domestic Product (GDP) will be due on Friday. If it is the case that the GDP number is stronger than estimated, it might slow the easing cycle and lift the Pound Sterling (GBP) against the USD. Markets are currently pricing 75 basis points (bps) of the Bank of England (BoE) rate cuts this year, which would take the benchmark rate from its current level of 5.25% to 4.5%.

GBP/USD

Overview
Today last price1.2676
Today Daily Change0.0021
Today Daily Change %0.17
Today daily open1.2655
Trends
Daily SMA201.2673
Daily SMA501.2666
Daily SMA1001.2668
Daily SMA2001.2588
Levels
Previous Daily High1.2664
Previous Daily Low1.2614
Previous Weekly High1.2684
Previous Weekly Low1.2539
Previous Monthly High1.2894
Previous Monthly Low1.2575
Daily Fibonacci 38.2%1.2645
Daily Fibonacci 61.8%1.2633
Daily Pivot Point S11.2624
Daily Pivot Point S21.2594
Daily Pivot Point S31.2574
Daily Pivot Point R11.2675
Daily Pivot Point R21.2695
Daily Pivot Point R31.2725

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