Forex analytics and overview

GBP/USD Lower Ahead of UK Inflation

2023.06.20 10:57

MarketPulse

  • UK inflation expected to fall to 8.4% on Wednesday
  • BoE likely to raise rates on Thursday
  • Fed Chair Powell to testify before House committee on Wednesday

The British pound is lower on Tuesday. In the European session, is trading at 1.2739, down 0.41%.

UK inflation expected to ease

The UK releases the May inflation report on Wednesday and BoE policy makers will be hoping that inflation continues to trend lower. Inflation dropped in April to 8.7%, decelerating for a second straight month. The consensus stands at 8.4%, and the good news is that those awful readings above 10% appear to be over. On a monthly basis, inflation is expected to fall to 0.5% in May, down from 1.2% in April.

Inflation appears to have peaked and is heading lower, but nobody at the Bank of England is smiling. The UK is expected to have one of the highest inflation rates in the G-20 this year at 6.9% and the BoE’s 2% target is miles away. Finance Minister Sunak has set a goal of lowering inflation to 5% by the end of the year, which seems feasible if inflation continues to downtrend in the coming months.

The BoE will be in the spotlight on Thursday when it makes its rate announcement. The markets have priced in a 25-basis point hike at 70%, with a 30% chance of an oversize 50-bp increase. If inflation falls as expected to 8.4% or lower, the MPC should be able to proceed with the 25-bp hike, although central banks have a tendency of surprising the money markets.

In the US, it’s an unusually light data calendar this week. There are no tier-1 releases on Tuesday, and the markets are looking ahead to Wednesday, with Jerome Powell testifying before the House Financial Services Committee. Powell will have to clarify to lawmakers the Fed’s interest rate path, as the Fed paused last week after ten straight hikes but expects to renew hiking in July.

GBP/USD Daily Chart

GBP/USD Technical

  • 1.2719 is under pressure in support. Next, there is support at 1.2589
  • There is resistance at 1.2848 and 1.2950

Original Post

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 96,401.83 0.04%
ethereum
Ethereum (ETH) $ 2,793.64 3.99%
xrp
XRP (XRP) $ 2.57 0.52%
tether
Tether (USDT) $ 1.00 0.03%
bnb
BNB (BNB) $ 667.22 1.69%
solana
Solana (SOL) $ 171.31 0.08%
usd-coin
USDC (USDC) $ 1.00 0.00%
dogecoin
Dogecoin (DOGE) $ 0.245255 0.61%
cardano
Cardano (ADA) $ 0.775535 1.27%
staked-ether
Lido Staked Ether (STETH) $ 2,786.06 3.78%
tron
TRON (TRX) $ 0.242418 1.97%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 96,184.77 0.01%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,296.25 2.66%
chainlink
Chainlink (LINK) $ 17.90 2.49%
avalanche-2
Avalanche (AVAX) $ 25.63 3.01%
sui
Sui (SUI) $ 3.38 1.19%
stellar
Stellar (XLM) $ 0.332996 1.59%
litecoin
Litecoin (LTC) $ 127.18 1.79%
the-open-network
Toncoin (TON) $ 3.76 3.90%
shiba-inu
Shiba Inu (SHIB) $ 0.000016 2.91%
leo-token
LEO Token (LEO) $ 9.73 0.05%
hedera-hashgraph
Hedera (HBAR) $ 0.213781 0.88%
mantra-dao
MANTRA (OM) $ 8.65 15.19%
usds
USDS (USDS) $ 1.00 0.02%
hyperliquid
Hyperliquid (HYPE) $ 24.21 2.15%
weth
WETH (WETH) $ 2,793.56 3.98%
polkadot
Polkadot (DOT) $ 5.06 0.74%
bitcoin-cash
Bitcoin Cash (BCH) $ 329.30 3.69%
bitget-token
Bitget Token (BGB) $ 5.13 2.29%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.18%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,960.08 3.91%
uniswap
Uniswap (UNI) $ 9.07 3.16%
monero
Monero (XMR) $ 236.44 1.90%
near
NEAR Protocol (NEAR) $ 3.46 1.79%
pepe
Pepe (PEPE) $ 0.00001 4.21%
whitebit
WhiteBIT Coin (WBT) $ 27.46 0.36%
aave
Aave (AAVE) $ 248.42 1.95%
bittensor
Bittensor (TAO) $ 432.64 0.80%
ondo-finance
Ondo (ONDO) $ 1.14 0.36%
aptos
Aptos (APT) $ 6.10 1.44%
internet-computer
Internet Computer (ICP) $ 7.18 1.69%
dai
Dai (DAI) $ 0.99966 0.03%
official-trump
Official Trump (TRUMP) $ 16.30 1.40%
ethereum-classic
Ethereum Classic (ETC) $ 20.71 1.83%
mantle
Mantle (MNT) $ 0.915948 0.93%
tokenize-xchange
Tokenize Xchange (TKX) $ 38.06 2.90%
okb
OKB (OKB) $ 49.49 0.85%
gatechain-token
Gate (GT) $ 23.41 1.39%
susds
sUSDS (SUSDS) $ 1.04 0.09%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 96,372.82 0.03%