GBP/USD tumbles to fresh lows near 1.2980 post-CPI

  • GBP/USD eases further ground on Wednesday.
  • UK CPI rose 1.3% YoY in December, below estimates.
  • BoE’s Saunders favours the current accommodative stance.

The sterling is losing its shine further on Wednesday and is now motivating GBP/USD to recede to the vicinity of 1.2980, or daily lows.

GBP/USD weaker on data, BoE

Cable is fading Tuesday’s gains after UK inflation figures tracked by the CPI disappointed expectations in December, rising at an annualized 1.3% (from 1.5%) and coming in flat on a monthly basis. In addition, consumer prices excluding food and energy costs (Core CPI) also came in short of estimates at 0.0% inter-month and 1.4% from a year earlier.

Adding to the downside in the pound, BoE’s M.Saunders said earlier today that an interest rate cut could be appropriate amidst the current economic conditions and the slowdown in the labour market. It is worth recalling that Saunders voted for a rate cut in the last two BoE meetings.

More from the UK docket is coming on Friday with the release of Retail Sales figures for the month of December. Later on Wednesday, the signing of the US-China’s ‘Phase One’ deal is expected to dominate the headlines in the global markets.

What to look for around GBP

The quid is suffering the poor domestic data and increasing speculations of a reduction in the policy rate by the Bank of England at some point in the short-term horizon. In addition, the currency is expected to remain under pressure in the next months, as economic and political uncertainty are predicted to re-emerge after the Brexit deadline on January 31st. Furthermore, extra effervescence between the EU and the UK is almost priced in, particularly when comes to negotiations on the trade front.

GBP/USD levels to consider

As of writing, the pair is retreating 0.13% at 1.2999 and a breakdown of 1.2954 (2020 low Jan.14) would expose 1.2904 (low Dec.24 2019) and finally 1.2757 (100-day SMA). On the upside, initial hurdle emerges at 1.3075 (21-day SMA) seconded by 1.3212 (high Jan.7) and then 1.3284 (high Dec.31 2019).


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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD pressured under 1.11 amid virus fears, ahead of the ECB

EUR/USD is trading below 1.11, under pressure as fears of the coronavirus weigh on markets. The ECB is set to leave rates unchanged and provide views about the current economic environment. 


GBP/USD consolidates gains above 1.31 after parliament seals Brexit

GBP/USD is trading above 1.31, consolidating its gains. The House of Lords gave its final seal to Brexit. Speculation ahead of the BOE's decision continues after upbeat data diminished chances for an imminent move.


Forex Today: Coronavirus fears spread and weigh on markets, Aussie surges, all eyes on the ECB

Chinese authorities have shut down access links to Wuhan, the large provincial capital where the coronavirus originates from. The news, coming ahead of the Chinese Lunar New Year, is weighing on markets. 

Read more

WTI hits 7-week low, potential bull RSI divergence on 1H

WTI oil fell to $55.68 soon before press time, the lowest level since Dec. 3, having declined by 3.73% on Wednesday. The black gold has found acceptance below $56.60, which is the 61.8% Fibonacci retracement (one of the golden ratio) of the rally from $51.03 to $65.62.

Oil News

USD/JPY drops to fresh eight-day lows near 109.50

USD/JPY extends losses and trades close to an eight-day low near 109.50 in a relatively risk-off environment, with the media headlines full of the coronavirus as it spreads internationally. Bears can look to the golden ratio around mid-108s.