GBP unlikely to see notable gains following CPI release – MUFG

FXStreet Insights Team FXStreet

The ONS has just released the July CPI data. Economists at MUFG Bank do not expect the British Pound (GBP) to enjoy substantial gains following inflation figures.

Inflation surprises modestly to the upside

The drop overall in inflation was a little less than expected. The core CPI rate remained unchanged at 6.9% with services CPI YoY accelerating from 7.2% to 7.4%. The data will clearly add to the pricing probability of the BoE going by 50 bps rather than 25 bps in September but we doubt there will be a substantial shift in pricing at this juncture.

Given we believe there are upside risks for the Dollar at the moment, we would play long GBP views versus the Euro for now, although like yields we doubt GBP will see notable gains following this CPI release.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD eases to near 1.1650, eyes US PCE for fresh impetus

EUR/USD turns south to test 1.1650 in European trading on Friday, facing rejection once again near seven-week highs. The pair, however, continues to draw support from persistent US Dollar selling bias, despite a cautious market mood. Traders now await the US September PCE inflation and UoM Consumer Sentiment data.

GBP/USD holds gains near 1.3350 ahead of US data

GBP/USD sticks to a positive bias near 1.3350 in the European session on Friday. Traders prefer to wait on the sidelines ahead of the key US inflation and sentiment data due later in the day. In the meantime, broad-based US Dollar weakness helps the pair stay afloat.

Gold remains below $4,250 barrier as traders await US PCE data for directional impetus

Gold gains some positive traction on Friday, though it remains confined in the weekly range. Dovish Fed expectations continue to undermine the USD and lend support to the commodity. Bulls, however, might opt to wait for the US PCE Price Index before placing aggressive bets.

UoM Consumer Sentiment Index expected to post a mild recovery in December

December’s preliminary Michigan Consumer Sentiment Index is forecast to have picked up to 52 from a three-year low of 51.0 in November. A stalled labour market and higher price pressures are likely to weigh on consumers’ confidence.

Canada Unemployment Rate expected to edge higher in November ahead of BoC rate decision

Statistics Canada will release its Labour Force Survey on Friday, and markets are bracing for a weak print. The Unemployment Rate is expected to tick higher to 7% in November, while the Employment Change is forecast to come in flat after a nice gain in October.

Pi Network Price Forecast: Bearish streak nears critical support trendline

Pi Network (PI) edges lower on Friday for the third consecutive day, approaching a local support trendline. The on-chain data suggests an increase in supply pressure as Centralized Exchanges (CEXs) experience a surge in inflows.