GBP/USD dips below 1.30 on softer than expected UK inflation data

GBP/USD Forecast: Additional losses likely below 1.2930 as markets scale back hawkish BoE bets

GBP/USD extended its slide in the early European session on Wednesday after closing in negative territory for the third straight day on Tuesday. The pair touched its lowest level in a week at 1.2930, but it recovered above 1.2950.

Inflation in the UK, as measured by the change in the Consumer Price Index, declined to 7.9% on a yearly basis in June from 8.7% in May. This reading came in below the market expectation of 8.2%. Underlying details of the report also showed that the annual Producer Price Index (PPI) – Input declined 2.7%. Read more…

GBP/USD outlook: Dips below 1.30 on softer-than-expected UK inflation data

Cable accelerated below 1.30 support in early Wednesday, following softer-than-expected UK inflation data for June, which should ease pressure on Bank of England to continue its cycle of sharp interest rate raising. Inflation in Britain fell to 7.9% in June from 8.7% previous May and fell below 8.2% forecast, while core CPI (closely watched by BoE), stripped for volatile food, energy, alcohol and tobacco components, fell to 6.9% last month, from 7.1% in May (the highest in over three decades) and also below consensus at 7.1%.

Better-than-expected inflation data generated initial signal that strong rise in consumer prices might start to recede and made immediate impact on rate outlook, dropping bets for next month’s hike from 50 to 25 basis points. The pair extends pullback from new 2023 high (1.3141) into fourth consecutive day and dipped below psychological 1.30 support. Read more…

Pound Sterling declines further as UK’s consumer and producer prices cool down

The Pound Sterling (GBP) attracts significant offers as the United Kingdom’s June inflation report has turned out much softer than expected. The GBP/USD pair slipped swiftly below the psychological support of 1.3000 after the data release, and it is expected to deliver more weakness. The monthly headline Consumer Price Index (CPI) expanded at a negligible pace of 0.1% in June as households and firms face the burden of higher interest rates from the Bank of England (BoE).

Inflationary pressures in the United Kingdom eased more than what markets expected, supported by declining prices of goods and services at factory gates and aggressively restrictive monetary policy from BoE policymakers. However, investors are still cautious over whether UK Prime Minister Rishi Sunak would meet his promise of halving inflation by year-end ahead of a probable election in 2024. Read more…