Pound Sterling Price News and Forecast: GBP jumps as UK inflation ticks up, Fed-BoE policy in focus

FXStreet Team FXStreet

Pound Sterling jumps as UK inflation ticks up, Fed-BoE policy in focus

The Pound Sterling (GBP) surges to near 1.3220 against the US Dollar (US) in Wednesday's London session after the release of the hot UK inflation data for August. The GBP/USD pair reclaims the immediate resistance of 1.3200, however, it is expected to face sheer volatility as the Federal Reserve’s (Fed) monetary policy decision will be announced at 18:00 GMT.

According to the CME FedWatch tool, the central bank is certain to start reducing interest rates. This will be the first interest rate cut decision by the Fed in over four years. However, the debate is over the pace by which key borrowing rates will be reduced. 30-day Federal Funds Futures pricing data shows that the probability of the central bank cutting rates by 50 basis points (bps) to 4.75%-5.00% is at 65%, while the rest favors a 25-bps rate cut. Read more...

GBP/USD Forecast: Pound Sterling gathers bullish momentum after UK data, Fed is next

GBP/USD gained traction in the European session on Wednesday and climbed above 1.3200 after closing in negative territory on Tuesday. The pair's technical outlook points to a buildup of bullish momentum as market focus shifts to the Federal Reserve's monetary policy announcements.

The UK's Office for National Statistics reported early Wednesday that annual inflation, as measured by the change in the Consumer Price Index (CPI), held steady at 2.2% in August, as expected. The core CPI, which excludes volatile food and energy prices, rose 3.6% on a yearly basis, up from the 3.3% increase recorded in July and above analysts' estimate of 3.5%. With the immediate reaction, Pound Sterling gathered strength against its rivals. Read more...

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EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.