GBP/USD saw a decline below 1.28500 on Wednesday as Consumer Price Index (CPI) inflation decreased on both sides of the Atlantic. This marks the end of a four-day winning streak for Cable, with upcoming UK GDP growth and US Retail Sales data on the horizon.
Forex Today: Soft or hard landing? Upcoming US data will have a say
UK QoQ GDP growth is expected to dip to 0.6% from the previous 0.7%, while annualized UK GDP is set to rise to 0.9% from 0.3%. In the US, MoM Retail Sales are forecasted to bounce back to 0.3% after a flat reading in June.
The US CPI inflation rate in July came in slightly below expectations at 2.9% YoY. Core CPI also saw a decrease to 3.2% annually. Despite lower consumer-level inflation, rate markets are now pricing in a 40% chance of a double-cut from the Federal Reserve on September 18.
UK CPI rose YoY in July but missed market forecasts, while core CPI figures eased slightly. The Pound Sterling remains in a technical uptrend against the US Dollar, with bullish momentum supported by higher lows.
Analysis: What Does This Mean for You?
If you’re a forex trader or investor, the recent pullback in GBP/USD could present buying opportunities if the bullish trend continues. Keep an eye on upcoming economic data releases, as they can impact market sentiment and currency movements. Stay informed and consider your risk tolerance before making any trading decisions.