Forex Today: Pound Sterling rises after UK inflation data, eyes on FOMC Minutes

Eren Sengezer FXStreet

Here is what you need to know on Wednesday, August 16:

Following Tuesday's choppy action, risk flows seem to have returned to financial markets mid-week. Second-quarter Gross Domestic Product (GDP) growth figures will be featured in the European economic docket alongside Employment Change data. Later in the day, Housing Starts and Building Permits from the US will be watched closely by market participants before the Federal Reserve releases the minutes of the July policy meeting at 18:00 GMT.

During the Asian trading hours, the Reserve Bank of New Zealand (RBNZ) announced that it left the policy rate unchanged at 5.5% as expected. In its policy statement, the RBNZ noted that policymakers agreed to keep the policy rate at restrictive levels for the foreseeable future and added that inflation is expected to decline within the target band by the second half of 2024. NZD/USD gained traction following the RBNZ policy decisions and the pair was last seen rising toward 0.6000, gaining more than 0.5% on the day.

Inflation in the UK, as measured by the change in the Consumer Price Index (CPI), declined to 6.8% on a yearly basis in July from 7.9% in June, matching the market expectation. The Core CPI, which excludes volatile food and energy prices, held steady at 6.9% in the same period and the annual Retail Price Index dropped to 9% from 10.7%. Although inflation-related data releases largely came in line with analysts' forecasts, GBP/USD edged higher toward 1.2750 in the European morning.

Pound Sterling price today

The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies today. Pound Sterling was the strongest against the US Dollar.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.18%	-0.33%	-0.05%	-0.30%	-0.12%	-0.53%	-0.04%
EUR	0.19%		-0.15%	0.12%	-0.11%	0.08%	-0.34%	0.17%
GBP	0.33%	0.15%		0.28%	0.04%	0.21%	-0.20%	0.29%
CAD	0.05%	-0.12%	-0.28%		-0.23%	-0.04%	-0.47%	0.04%
AUD	0.30%	0.13%	-0.03%	0.22%		0.17%	-0.23%	0.27%
JPY	0.11%	-0.10%	-0.25%	0.03%	-0.17%		-0.43%	0.07%
NZD	0.53%	0.34%	0.19%	0.47%	0.24%	0.43%		0.52%
CHF	0.03%	-0.16%	-0.31%	-0.04%	-0.27%	-0.08%	-0.50%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Meanwhile, US stock index futures trade in positive territory following the sharp decline witnessed in Wall Street's main indexes on Tuesday after Fitch Ratings warned that they could downgrade ratings of some lenders. The US Dollar Index consolidates its recent gains and holds above 103.00, while the 10-year US Treasury bond yield continues to fluctuate at around 4.2%.

EUR/USD spent the Asian session moving sideways slightly above 1.0900. With the USD coming under modest selling pressure in the European morning, the pair inched higher toward 1.0930.

Following a six-day rally, USD/JPY stabilized at around mid-145.00s on Tuesday. The pair holds steady near that level in the early European session.

Gold price dropped below $1,900 for the first time since late June on Tuesday but managed to rebound above that level before the end of the day. With 10-year US yield holding comfortably above 4%, XAU/USD is having a hard time gathering recovery momentum.

Bitcoin edged lower amid risk aversion on Tuesday but didn't have a hard time stabilizing above $29,000. Ethereum lost nearly 1% on Tuesday and was last seen trading within a touching distance of $1,800.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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