GBP/USD remained steady on Monday as volatility subsided, paving the way for upcoming inflation data releases. The recent drop in Cable to long-term averages below 1.2700 has calmed down, with investors now focused on key inflation prints scheduled for the middle of the week.
Forex Today: UK jobs report and US Producer Prices… for starters
On Tuesday, US Producer Price Index (PPI) figures are expected to show a decrease in core PPI to 2.7% from 3.0%. Wednesday will bring YoY core CPI inflation data, with a forecasted drop to 3.2% from 3.3%. Market sentiment hinges on balanced inflation outcomes for equity market performance.
Meanwhile, the UK will see a flurry of economic releases, with UK unemployment claims on Tuesday and UK CPI inflation on Wednesday. Core UK CPI is projected to dip to 3.4% YoY from 3.5%, while headline CPI is set to rise to 2.3% YoY from 2.0%.
GBP/USD Price Forecast
Cable is hovering near the 200-day Exponential Moving Average (EMA) at 1.2649, showing signs of a bearish pullback. Although bids have prevented a drop below the 1.2600 level, bullish momentum has waned, resulting in a more than 2% decline from July’s 12-month highs above 1.3000.
GBP/USD Daily Chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world, dating back to 886 AD, and is the official currency of the United Kingdom. It accounts for 12% of all global foreign exchange transactions, with key trading pairs like GBP/USD and GBP/JPY. The value of GBP is heavily influenced by the Bank of England’s monetary policy decisions, economic data releases, and trade balance indicators.
Understanding the impact of inflation data on currency pairs like GBP/USD can help investors and traders make informed decisions in the forex market. Stay tuned for updates on key economic indicators and their effects on the Pound Sterling and US Dollar exchange rate.