GBP/USD Forecast: Is the pound recovery over already?
GBP/USD has lost its traction early Wednesday and erased a large portion of Tuesday's impressive gains. The pair trades below the key 1.2400 level and additional losses could be witnessed in case this level is confirmed as resistance.
The data published by the UK's Office for National Statistics revealed on Wednesday that annual inflation, as measured by the Consumer Price Index (CPI), jumped to its highest level in more than two decades at 9% in April. This print, however, came in slightly lower than the market forecast of 9.1%. Additionally, the Core CPI, which excludes volatile food and energy prices, rose to 6.2% from 5.7% as expected. Read more...
GBP/USD extends post-UK CPI decline, flirts with 1.2400 mark amid modest USD strength
The GBP/USD pair added to its heavy intraday losses and dropped to a fresh daily low, below the 1.2400 mark during the early part of the European session.
Having failed to conquer the 1.2500 psychological mark, the GBP/USD pair witnessed aggressive selling on Wednesday and snapped a three-day winning streak to a two-week high. The British pound weakened across the board after data released from the UK showed that the headline CPI soared to a 40-year high level of 9% in April. Given that the UK economic activity had slowed sharply during the first quarter, the data further fueled stagflation fears. Apart from this, the UK-EU impasse over the Northern Ireland protocol exerted additional downward pressure on sterling. Read more...
GBP/USD to mostly trade below the 1.25 mark during the summer – ING
The oversold pound has faced a strong rebound this week, recouping some of its recent sharp losses as global risk appetite improved. However, economists at ING expect GBP/USD to move below the 1.25 level in the coming months.
“While the good GBP momentum may continue as equities find some stability in the coming days, the pound still faces two major downside risks in the coming months: a) a further dovish repricing of BoE rate expectations (the implied rate for end-2022 is still 2.0%); b) Brexit-related risk, as the unilateral suspension by the UK of parts of the Northern Ireland agreement would likely trigger a trade war with the EU.” Read more...
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