GBP/USD lost nearly 200 pips after the US inflation data.US Dollar Index jumped above 109.00, reflecting broad dollar strength.
GBP/USD came under heavy bearish pressure and erased nearly 200 pips in less than 30 minutes after the US inflation data.The pair was last seen losing 1.05% on a daily basis at 1.1557.
The US Bureau of Labor Statistics reported that the Core Consumer Price Index climbed to 6.3% in August from 5.9% in July. This print surpassed the market expectation of 6.1%. Although the headline CPI edged lower to 8.3% from 8.5% in the same period, it still arrived above analysts’ forecast of 8.1%.
The benchmark 10-year US Treasury bond yield is up nearly 3% on the day and the US Dollar Index is rising 1% at 109.35. According to the CME Group’s FedWatch Tool markets are currently fully pricing in a 75 basis points rate hike in September.
The hot inflation report also weighed on risk mood. Nasdaq Futures, which was up 1% earlier in the day, is now losing more than 3%.Earlier in the day, mixed labour market data from the UK helped the British pound find demand but the reaction to the US data clearly shows that the dollar’s market valuation is the primary driver of the pair’s action.
EUR/USD dips back below parity on dollar’s strength
The EUR/USD turned sharply lower on Tuesday, erasing three days of gains and fell to the parity area. The pair pulled back from three-week highs to the lowest level since Thursday following US inflation data that triggered a rally of the US dollar across the board. Stocks and Treasuries tumbled after the numbers.
GBP/USD continues to push lower toward 1.1500
GBP/USD suffered large losses and continued to fall toward 1.1500 during the American trading hours on Tuesday. The data from the US showed that the annual Core CPI jumped to 6.3% in August from 5.9% in July, triggering a strong dollar rally.
Gold closes in on $1,700 on surging US yields
After having dropped below $1,700, gold staged a rebound but failed to gather momentum. With the benchmark 10-year US Treasury bond yield rising more than 2% on the day above 3.4%, XAU/USD came under renewed bearish pressure and started to push lower toward $1,700.