GBP/USD balances below 1.2500 ahead of UK Inflation, Fed seeks price stability
- GBP/USD is juggling in a 1.2484-1.2496 as investors await UK Inflation.
- The annual UK CPI is seen at 9.1% against the prior print of 7%.
- Pound bulls have strengthened on upbeat market mood and Employment data.
The GBP/USD pair is displaying back and forth moves in a narrow range of 1.2484-1.2496 in the Asian session as investors are on the sidelines ahead of the UK Consumer Price Index (CPI) figures on Wednesday. As per the market consensus, the annual inflation figure is eyeing the rooftop. The yearly CPI figure is seen at 9.1%, potentially higher than the prior print of 7%. While, the annual core CPI would jump to 6.2%, against the former figure of 5.7%.
A higher reading of the UK inflation is compelling for more rate hikes by the Bank of England (BOE) in the next monetary policy meetings. It would be justified to state that BOE Governor Andrew Bailey could feature a jumbo rate hike to contain the inflation mess. The inflation looks sky-rocketing in the UK zone and the BOE needs to take certain quantitative measures to safeguard the paychecks of the households.
Meanwhile, the jobless claims in the sterling area have reduced sharply by 56.9k, higher than the expectations of 38.8k. Also, the monthly ILO Unemployment Rate has been improved to 3.7% than the consensus and prior print of 3.8%.
On the dollar front, the US dollar index (DXY) is hovering around 103.30 and is expected to scale lower amid an improvement in the risk appetite of the market participants. The odds of a jumbo rate hike by the Federal Reserve (Fed) in June are advancing sharply as the Fed is focusing to bring price stability sooner. Fed chair Jerome Powell has stated in Q&A at Wall Street Journal that inflation needs to get dropped in a ‘convincing’ way.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
