Big Ben with flag of United Kingdom in London, UK

The GBP/USD pulled back after the growing US Consumer Index. It tumbled to a low of 1.4050 which was the lowest since the beginning of May.

Upsurge in US Inflation

The GBP/USD retreated after the US recorded a rise in its Consumer inflation figures. The Consumer Price Index rose by 4.2% which was the fastest CPI growth rate since September,2008. The core CPI increased 3% annually and 0.9% monthly excluding energy prices and volatile food.

The rise in consumer inflation numbers could motivate the Fed to push interest rates higher earlier than expected. A faster timeline for increasing the interest rates will be bullish for the US Dollar.

Analysts are on the lookout for the publishing of the latest Producer Price Index (PPI) by the statistics agency. With a surge in the price of commodities such as crude oil, copper and lumber, analysts expect the PPI to rise. They are closely watching the PPI figures expecting it record a rise of 5.9%. The core PPI is expected to rise from 3.1% to 3.7% this month.

The GBP/USD will also be affected by the high unemployment rate figures. Data by the Bureau of Labor Statistics show that the unemployment rate in April rose to 6.1%. the records also outline that there is an intensifying shortage of available workers.

The GBP/USD also reacted to the strong UK GDP data. The Office of National Statistics (ONS) show that the economy recoiled by 2.1% in March as the country started to recover. The economy declined by 1.5% which was better than the anticipated decline of 1.7%.

As the economy struggled to bounce back in March, many sectors recorded a surge in output rates. Among the sectors that rose was, the industrial, construction and manufacturing industries.

GBP/USD Forecast

Support and resistance: 

Support: 1.400 and 1.3500

Resistance: 1.4100 and 1.4150

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign Up for Our Newsletters

Get exclusive content in your inbox.

You May Also Like

GBP/USD Forecast with BoE Interest Rate Decision on the Horizon

GBP/USD is seesawing along 1.3800 ahead of the BoE interest rate decision. It is likely to be range-bound between 1.3800 and 1.3900 ahead of the event.

EUR/USD Forecast Ahead of US Inflation and Retail Sales Data

The EUR/USD pair surged on Friday after the disappointing US non-farm payrolls (NFP) data. The US will publish the latest inflation and retail sales data.

GBP/USD Forecast Ahead of the UK Retail Sales

GBP/USD has eased on its decline ahead of the UK retail sales data. The data comes at a time when UK government postponed reopening by a month.

EUR/USD In The Red Ahead of Jobless Claims

The EUR/USD pair has been on a bearish consolidation for the past few days. According to data published on Wednesday, eurozone inflation improved in July.