GBP/USD faces stiff resistance at 1.2770

Pound Sterling baffles as stubborn core inflation accelerates hawkish BoE bets

The Pound Sterling (GBP) struggles to find a decisive move as the upside seems restricted due to deepening recession woes, while the downside is supported due to expectations of more interest rate hikes from the Bank of England (BoE). The GBP/USD pair trades inside Wednesday’s range as investors await British Retail Sales data for July. The release of the entire economic indicators will provide lucid guidance to investors about further policy action.

Bets in favor of a hawkish BoE interest rate decision for the September policy meeting rose sharply as the United Kingdom’s strong wage growth and stubborn core inflation makes further policy tightening more necessary. Meanwhile, Friday’s Retail Sales data is expected to demonstrate a slowdown in consumer spending momentum due to wet weather. Read more…

GBP/USD Forecast: Pound Sterling faces stiff resistance at 1.2770

GBP/USD lost its traction in the American session on Wednesday but ended up closing the day in positive territory. The pair stays relatively quiet above 1.2700 on Thursday. Although the US Dollar benefitted from risk aversion and the hawkish tone in the minutes of the Federal Reserve’s July meeting on Wednesday, GBP/USD’s losses remain limited as inflation data from the UK allowed Pound Sterling to hold its ground.

The UK’s FTSE 100 Index trade modestly higher early Thursday, while US stock index futures gain between 0.2% and 0.3%. Wall Street’s main indexes suffered heavy losses in the first half of the week and helped the USD outperform its risk-sensitive rivals. In case major equity indexes in the US open in the green and continue to push north, GBP/USD could regain its traction. Read more…