Pound Sterling Price News and Forecast: GBP/USD flatlines near 1.3435 in Thursday’s Asian session

British Pound trades flat as cooling UK inflation, Iran tensions cap upside

The GBP/USD pair holds steady around 1.3435 during the Asian trading hours on Thursday. However, a sharp slowdown in UK inflation and uncertainty surrounding US–Iran talks could weigh on the British Pound (GBP) against the US Dollar (USD). Traders await the preliminary readings of the Purchasing Managers' Index (PMI) for May from the UK and the US, which are due later on Thursday.

The UK headline Consumer Price Index (CPI) inflation eased to 2.8% over the year in April from 3.3% in March, the Office for National Statistics (ONS) showed on Wednesday. This figure came in softer than the expectation of 3.0%. Additionally, the core CPI, excluding volatile food and energy items, rose 2.5% year-over-year in April, versus 3.1% prior and below the market consensus of 2.6%. Read more...

Pound Sterling shrugs off its own disinflation

Pound Sterling did something faintly absurd on Wednesday. Hours after data showed UK inflation cooling faster than anyone expected, and with the Bank of England (BoE) governor sounding notably dovish in an afternoon speech, the pound rallied anyway. Headline Consumer Price Index (CPI) for April slipped to 2.8% YoY, below forecasts and well down from the prior reading, while the core measure cooled to 2.5%. That is the kind of print that normally invites the market to price in more rate cuts and sell the currency. Instead, GBP/USD pushed up to a high near 1.3450 before easing back, settling just under that level and comfortably holding the 1.3400 handle.

The explanation has little to do with the pound and everything to do with the US Dollar, which slid broadly through the US afternoon on easing Middle East tensions and softer Treasury yields. Sterling barely had to move; it simply stood still and let the Dollar fall around it. That is a fragile kind of strength. The domestic story, soft CPI plus a dovish Bailey, argues for a weaker pound, not a stronger one, and the moment the Dollar finds its footing that gap tends to reassert itself. Read more...

British Pound rebounds as Iran deal hopes sink USD

The GBP/USD pair posts gains of over 0.30% during the North American session on Wednesday as the US Dollar (USD) turns negative for the day amid optimism about US-Iran talks that could end the conflict, which has lasted nearly 11 weeks. At the time of writing, the pair trades at 1.3449, after bouncing off daily lows of 1.3375.

Market mood turned positive on US President Trump’s comments that the US is in the final stages of talks with Iran, which weighed on the US Dollar and Oil prices. Nevertheless, mixed headlines around the conflict are looming as Iran’s Foreign Minister spokesman said that neither the US nor Israel should be allowed to pass through Hormuz, via Al Jazeera. Read more...