GBP/USD pares stronger UK CPI-led gains, up a little as traders keenly await FOMC minutes

By TradeRadius | Wed, 24 May 2023 09:34:35 UTC

img for post
  • GBP/USD attracts some intraday buying in reaction to stronger UK inflation data.
  • Expectations for fewer BoE rate hikes cap any further gains amid a bullish USD.
  • Investors now look to the FOMC meeting minutes for a fresh directional impetus.

The GBP/USD pair fades an intraday bullish spike to the 1.2470 region and retreats to the lower end of its daily trading range during the first half of the European session. The pair is currently placed around the 1.2420 area and seems vulnerable to prolonging its recent retracement slide witnessed over the past two weeks or so.

The British Pound (GBP) did get a minor lift in a knee-jerk reaction to the release of stronger-than-expected UK inflation figures, though the intraday uptick runs out of steam rather quickly. The Office for National Statistics reported that the headline UK CPI rose 8.7% YoY in April as compared to consensus estimates for a reading of 8.2%. This, however, marks a sharp deceleration from the 10.1% YoY rate registered in March, reaffirming expectations that fewer rate increases by the Bank of England (BoE) will be needed in the coming months to bring down inflation. This, along with the underlying bullish sentiment surrounding the US Dollar (USD), contributes to capping the upside for the GBP/USD pair.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, stands tall near a two-month high set on Tuesday and continues to draw support from the possibility of further rate hikes by the Federal Reserve (Fed). The speculations were fueled by the recent hawkish comments by several Fed officials, suggesting that the US central bank will keep rates higher for longer. Apart from this, a softer risk tone - amid worries about the slowing global economy and the US debt ceiling woes - further benefits the Greenback's relative safe-haven status. This, in turn, attracts some sellers around the GBP/USD pair, though the downside remains cushioned ahead of the release of the FOMC minutes.

Investors will look for fresh clues about the Fed's rate-hike path, which will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the GBP/USD pair. Nevertheless, the aforementioned fundamental backdrop seems tilted in favour of bearish traders and suggests that the path of least resistance for spot prices is to the downside. Even from a technical perspective, the overnight breakdown below the 50-day Simple Moving Average (SMA) supports prospects for an extension of the pullback from over a one-year high touched earlier this month.

 

 

Share

Partners News

The best coolers for 2023, according to experts

Whether you’re camping, tailgating, or hosting a barbecue for friends and family, having a great cooler on hand to keep your food and drinks chilled and fresh for hours is key. Coolers come in a variety of shapes, sizes and shells, and the most popular brands (like Yeti and Rtic) are known for t...

By TradeRadius | 7 Minutes Ago

> >

Bud Light sales down nearly 30% compared to 2022 after partnership with transgender influencer

FOX Business’ Lydia Hu reports on the fallout from Bud Light’s controversial partnership with transgender influencer Dylan Mulvaney. Bud Light sales are down nearly 30% compared to last year after a boycott in response to its partnership with a transgender influencer, according to a report.

By TradeRadius | 7 Minutes Ago

> >

Biden, McCarthy debt ceiling deal claws back $21B in funding from IRS

Fox News' Senior Congressional Correspondent Chad Pergam has the latest on the debt ceiling deal on 'Varney & Co.' After weeks of back-and-forth, President Biden and Republican House Speaker Kevin McCarthy struck a bipartisan deal to raise the debt ceiling in exchange for a series of spending...

By TradeRadius | 29 Minutes Ago

> >

Teesside mayor struck secret deal to transfer Hartlepool property

Previous agreements by Ben Houchen to shift assets to developers ‘lacked transparency’

By TradeRadius | 39 Minutes Ago

> >

: SoFi stock pops as debt-ceiling deal could reignite student-loan refinancing business

Shares of SoFi Technologies Inc. SOFI, +11.09% were rising 8% in Tuesday’s session, with the debt-ceiling deal struck by President Joe Biden and House Republicans expected to help the company’s student-lending business, which has slumped amid the moratorium on student-loan payments. While the mo...

By TradeRadius | 39 Minutes Ago

> >

: Goldman Sachs mulling no more than 250 job cuts, source says

Goldman Sachs Group Inc. GS, -0.66% is cutting up to 250 jobs across the firm in its third round of layoffs since last fall, according to a source familiar with the firm. Goldman laid off 6% of its employees, or about 3,200 people, in January and in September it cut a few hundred employees. Goldman…

By TradeRadius | 39 Minutes Ago

> >

: U.S. oil futures settle below $70 a barrel, at lowest in nearly 4 weeks

U.S. oil futures declined on Tuesday, settling below $70 a barrel for the first time since early May. “We’ve seen oil prices slide back again as investors look towards the next stage of the U.S. debt ceiling saga and concerns that sticky inflation will likely act as a brake on demand and ergo th...

By TradeRadius | 39 Minutes Ago

> >

Personal loan interest rates edge up for 3- and 5-year loans

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as "Credible" below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

By TradeRadius | 39 Minutes Ago

> >

: August gold settles at $1,977.10/oz on Comex, up $14, or 0.7%

Volume: 251.16K 65 Day Avg: 16.01K 1,569% vs Avg 1,949.60 Day Range 1,981.90 1,682.10 52 Week Range 2,102.20

By TradeRadius | 50 Minutes Ago

> >

BitFlyer Embraces FATF's 'Travel Rule' as Japan Starts AML Regime

Ahead of Japan's strict crypto monitoring regime starting in June, cryptocurrency exchange bitFlyer has adopted tougher anti-money laundering (AML) rules for digital asset transactions. The measures are in line with global financial watchdog Financial Action Task Force’s (FATF) AML regulation k...

By TradeRadius | 51 Minutes Ago

> >