GBP/USD hangs near multi-month low, looks to UK CPI ahead of central bank event risks


  • GBP/USD remains confined in a familiar trading band near a multi-month low.
  • Expectations that the BoE is nearing the end of its rate-hiking cycle cap gains.
  • Traders now look to the UK CPI for some impetus ahead of the FOMC decision.

The GBP/USD pair continues with its struggle to register any meaningful recovery and extends its consolidative price moves for the third successive day on Wednesday. Spot prices trade below the 1.2400 mark during the Asian session and remain well within the striking distance of its lowest level since early June touched on Monday.

Traders now seem reluctant and opt to wait on the sidelines ahead of this week's key data/central bank event risks, starting with the release of the latest UK consumer inflation figures later today. The headline UK CPI is anticipated to have accelerated to 7.1% in August from 6.8% previous, while the core reading, which excludes seasonally volatile food and energy prices, is seen edging lower to 6.8% YoY rate from 6.9% in July. A surprisingly higher print will suggest that wage pressures are still feeding through into higher prices, which, in turn, should benefit the British Pound and provide a goodish lift to the GBP/USD pair.

The immediate market reaction, however, is more likely to remain limited as the focus remains glued to the Bank of England (BoE) monetary policy meeting on Thursday, against the backdrop of diminishing odds for more aggressive policy tightening. In fact, BoE Governor Andrew Bailey had told lawmakers earlier this month that the central bank is now "much nearer" to ending its run of interest rate increases. Furthermore, reviving recession fears, along with signs that the UK labour market is cooling, might put pressure on the BoE to pause its rate-hiking cycle soon, which should cap the upside for the GBP/USD pair.

In the meantime, investors on Wednesday will also look to the highly-anticipated FOMC policy decision, due to be announced later during the US session. The Federal Reserve (Fed) is expected to keep interest rates unchanged at the end of a two-day meeting, though the markets have been pricing in the possibility of one more 25 bps lift-off by the end of this year. Hence, the accompanying monetary policy statement and Fed Chair Jerome Powell's remarks at the post-meeting press conference will be scrutinized for cues about the future rate-hike path, which will influence the USD and provide a fresh impetus to the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2392
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.2392
 
Trends
Daily SMA20 1.2542
Daily SMA50 1.2713
Daily SMA100 1.2652
Daily SMA200 1.2434
 
Levels
Previous Daily High 1.2425
Previous Daily Low 1.237
Previous Weekly High 1.2548
Previous Weekly Low 1.2379
Previous Monthly High 1.2841
Previous Monthly Low 1.2548
Daily Fibonacci 38.2% 1.2404
Daily Fibonacci 61.8% 1.2391
Daily Pivot Point S1 1.2366
Daily Pivot Point S2 1.2341
Daily Pivot Point S3 1.2312
Daily Pivot Point R1 1.2421
Daily Pivot Point R2 1.2451
Daily Pivot Point R3 1.2476

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD fluctuates in daily range above 1.0600

EUR/USD fluctuates in daily range above 1.0600

EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.

EUR/USD News

GBP/USD stabilizes near 1.2450 ahead of Powell speech

GBP/USD stabilizes near 1.2450 ahead of Powell speech

GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.

GBP/USD News

Gold aiming to re-conquer the $2,400 level

Gold aiming to re-conquer the $2,400 level

Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.

Gold News

XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference

XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference

XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court. 

Read more

US outperformance continues

US outperformance continues

The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.

Read more

Forex MAJORS

Cryptocurrencies

Signatures