GBP/USD down after US CPI figures and UK GDP data

GBP/USD tallied another day of losses falling below 1.3050.
US CPI came in mixed and markets reduced the odds of a 50 bps cut.
Earlier in the session the UK reported weak GDP figures.

Patricio Martín FXStreet

The GBP/USD pair remains under pressure, trading near 1.3045 as the market reacted to the latest US inflation data. Economic activity released during the European session seems to have added pressure on the pound.

While the headline inflation declined, annual core CPI, which excludes volatile food and energy prices, remained unchanged at 3.2% in August, in line with market expectations. However, on a monthly basis, both CPI and core CPI rose by 0.2% and 0.3%, respectively, exceeding market forecasts. The data has led traders to reduce the odds of a 50-basis-point rate cut by the Federal Reserve and the market is now pricing in an 85% chance of a 25-basis-point cut.

What weakened the GBP was the report of soft Gross Domestic Product (GDP) releases during the European sessions. Despite this, leading indicators point to a potential rebound in UK economic activity, suggesting that the Bank of England is unlikely to cut rates by more than the currently anticipated 50 basis points by year-end, which could provide some support for the GBP.

GBP/USD Technical Outlook

The GBP/USD pair's decline to 1.3045 reflects deepening bearish pressure, with key technical indicators like the Relative Strength Index (RSI) pointing down near 50 and the Moving Average Convergence Divergence (MACD) firmly positioned in negative territory. This suggests that bearish sentiment could persist in the short term especially if the RSI breaks the 50 barrier.

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

EUR/USD looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.