Forex analytics and overview

GBP/USD: British Pound Edges Lower Ahead of UK Inflation

2024.06.18 12:11

The British pound has edged lower on Tuesday. is trading at 1.2683 in the European session at the time of writing, down 0.16% on the day. There are no UK events on Tuesday, while the US releases retail sales. On Wednesday, we’ll get a look at UK inflation for May.

US Retail Sales Expected to Post Small Gain

US retail sales were flat in April but are expected to improve to 0.2% m/m in May. Yearly, retail sales are projected to dip to 2.8%, compared to 3.0% in April.

The Federal Reserve will be keeping a close eye on today’s retail sales data, hoping that any improvement in May retail sales is mild, as a weakening economy will support cutting interest rates.

The Fed has done a good job slashing inflation, although the final sprint to achieving the 2% target is proving to be a tough challenge. Fed policymakers are likely to go ahead with an initial rate cut even if inflation remains above target, so long as they are confident that inflation will continue to fall.

The markets have priced in a quarter-point cut in September at 60%, according to the CME’s FedWatch tool. That is up from 53% a week ago but indicates that there is a strong chance that the Fed won’t change its “higher for longer” stance until November or December.

UK Inflation Expected to Fall to 2%

In the UK, inflation is expected to fall to 2% in May, down from 2.3% in April. This would mean inflation has dropped to the Bank of England’s 2% target for the first time since April 2021. Unfortunately for the government, a positive inflation report will not translate into a rate cut at Thursday’s meeting, since there is an election on July 4th and the BoE does not want to be viewed as meddling in the election campaign. As well, services inflation came in at 6% in April, and that has to drop before the BoE will press the rate-cut trigger. The markets have priced in an initial rate cut in August.GBP/USD-4-Hour Chart

GBP/USD Technical

  • GBP/USD faces resistance at 1.2734 and 1.2811
  • 1.2608 and 1.2531 are the next support lines

Original Post



Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 67,404.06 0.59%
ethereum
Ethereum (ETH) $ 3,526.22 0.52%
tether
Tether (USDT) $ 1.00 0.02%
bnb
BNB (BNB) $ 597.65 0.53%
solana
Solana (SOL) $ 173.81 2.49%
staked-ether
Lido Staked Ether (STETH) $ 3,526.07 0.49%
usd-coin
USDC (USDC) $ 1.00 0.05%
xrp
XRP (XRP) $ 0.594925 3.39%
dogecoin
Dogecoin (DOGE) $ 0.134947 7.58%
the-open-network
Toncoin (TON) $ 7.29 0.07%
cardano
Cardano (ADA) $ 0.43772 0.32%
tron
TRON (TRX) $ 0.134678 0.04%
avalanche-2
Avalanche (AVAX) $ 28.87 2.05%
shiba-inu
Shiba Inu (SHIB) $ 0.000018 1.67%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 67,462.07 0.77%
polkadot
Polkadot (DOT) $ 6.34 0.29%
chainlink
Chainlink (LINK) $ 14.33 1.96%
bitcoin-cash
Bitcoin Cash (BCH) $ 397.48 0.53%
near
NEAR Protocol (NEAR) $ 6.29 1.25%
uniswap
Uniswap (UNI) $ 7.99 0.52%
litecoin
Litecoin (LTC) $ 73.51 0.28%
dai
Dai (DAI) $ 1.00 0.03%
leo-token
LEO Token (LEO) $ 5.68 2.36%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,675.69 0.40%
pepe
Pepe (PEPE) $ 0.000012 3.31%
matic-network
Polygon (MATIC) $ 0.54027 1.80%
internet-computer
Internet Computer (ICP) $ 10.30 1.87%
kaspa
Kaspa (KAS) $ 0.181371 0.67%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.46 0.79%
ethereum-classic
Ethereum Classic (ETC) $ 24.17 2.45%
aptos
Aptos (APT) $ 7.41 0.91%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.08%
stellar
Stellar (XLM) $ 0.105755 0.30%
monero
Monero (XMR) $ 163.50 0.35%
mantle
Mantle (MNT) $ 0.897753 0.26%
blockstack
Stacks (STX) $ 1.92 1.29%
render-token
Render (RNDR) $ 6.96 4.06%
filecoin
Filecoin (FIL) $ 4.73 1.18%
injective-protocol
Injective (INJ) $ 27.67 4.23%
hedera-hashgraph
Hedera (HBAR) $ 0.074679 0.98%
dogwifcoin
dogwifhat (WIF) $ 2.63 2.85%
maker
Maker (MKR) $ 2,802.06 1.65%
arbitrum
Arbitrum (ARB) $ 0.778858 1.04%
okb
OKB (OKB) $ 42.94 1.39%
cosmos
Cosmos Hub (ATOM) $ 6.54 0.27%
immutable-x
Immutable (IMX) $ 1.65 2.96%
crypto-com-chain
Cronos (CRO) $ 0.094253 0.36%
vechain
VeChain (VET) $ 0.030861 2.33%
bittensor
Bittensor (TAO) $ 342.23 2.24%
arweave
Arweave (AR) $ 33.81 0.04%