GBP/USD steadies around 1.2300 as investors await US CPI, Brexit NIP jitters
|- GBP/USD is stuck around 1.2300 as upcoming US CPI data has soaked volatility from the FX domain.
- The yearly US core CPI could slip to 6% while inflation may edge lower to 8.1%.
- Next week, UK’s Employment data and CPI numbers will remain in focus.
The GBP/USD pair is continued to oscillate in a range of 1.2292-1.2377 ahead of the release of the US Consumer Price Index (CPI). The whole FX domain has stuck in a limited range but it looks like the cable tops the list.
The spree of major economic events from the past week starting with the interest rate announcement by the Federal Reserve (Fed) to the disclosure of the US Nonfarm Payrolls (NFP) and now the US inflation numbers have resulted in an extremely volatile trading environment. Investors are seeing the yearly US inflation at 8.1%, lower than the prior print of 8.5%, and core CPI excluding food and energy prices at 6%, significantly down from the former figure of 6.5%. However, the odds of a jumbo rate hike by the Fed in June’s monetary policy are still rock solid.
On the UK front, no decision-making over the Northern Ireland Protocol (NIP) has worsened the situation further. The spokesperson from the UK administration said Johnson urged them to deliver for the people of Northern Ireland. "We want to fix some of the underlying challenges" regarding the NIP, the spokesperson added.
Meanwhile, signs of recession in the sterling area are also denting the demand for pound against the greenback. Higher energy bills and the inability of the UK corporate to generate more jobs are pushing the economy towards recession. This week UK calendar will remain light while the next week investors will focus on the Employment data and the UK inflation.
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