Pound Sterling trades cautiously ahead of UK CPI data release
The Pound Sterling (GBP) trades with caution against its major currency peers, and is down 0.2% to near 1.3380 against the US Dollar (USD) during the early European trading session on Wednesday. The British currency is slightly under pressure ahead of the release of the United Kingdom (UK) Consumer Price Index (CPI) data for February at 07:00 GMT.
The Office for National Statistics (ONS) is expected to show that the core inflation – which strips off volatile items such as food, energy, alcohol, and tobacco – remained steady at 3.1% Year-on-Year (YoY). On a monthly basis, the headline CPI is estimated to have grown 0.4% after a 0.5% decline in January. Read more…
Pound Sterling bulls seem hesitant ahead of UK CPI; GBP/USD capped near 200-day SMA
The GBP/USD pair attracts fresh buyers during the Asian session on Wednesday, with bulls still awaiting a sustained strength beyond the 200-day Simple Moving Average (SMA) before placing fresh bets. Spot prices currently trade around the 1.3420-1.3425 region, up 0.10% for the day, as the focus now shifts to the UK consumer inflation figures.
The UK Office for National Statistics (ONS) will publish the Consumer Price Index (CPI) for February at 07:00 GMT later today amid the Bank of England’s (BoE) hawkish outlook. Last week, the UK central bank signaled the potential rate hike as early as April amid inflation fears stemming from the Iran war. This, in turn, suggests that the market reaction to the data is more likely to be short-lived, leaving the GBP/USD pair at the mercy of the US Dollar (USD) price dynamics and geopolitical developments. Read more…
GBP/USD holds onto 1.34 with Wednesday’s CPI set to test the BoE’s hawkish pivot
GBP/USD is trading close to 1.3420 heading into Wednesday, holding onto most of the week’s gains after a sharp round-trip from about 1.3250 on Monday’s ceasefire-driven sell-off to near 1.3480 on Tuesday. The pair has stabilized well above the 1.3360 area, with Tuesday’s late session fading slightly from the weekly highs in a narrow range.
Wednesday’s February Consumer Price Index (CPI) release at 07:00 GMT is the key event for the midweek market session. January’s reading came in at 3.0% YoY, down from 3.4% in December, with core CPI at 3.1% and services inflation at 4.4%. The consensus for February’s core CPI is 3.1% YoY, holding steady. The Bank of England’s (BoE) March meeting minutes noted that services inflation at 4.4% was well above the bank’s 4.1% forecast and warned that the Middle East energy shock would push headline CPI to between 3% and 3.5% over the next few quarters. Governor Andrew Bailey described the situation as one where “monetary policy cannot reverse this shock to supply” but “must respond to the risk of a more persistent effect on UK CPI inflation.” Read more…
