GBP/USD picks bids at 1.1500 as UK inflation rate trims to 9.9%.

GBP/USD has sensed buying interest as the UK inflation rate has declined by 30 bps to 9.9% vs. expectations.HiThe deadly duo of a double-digit inflation rate and a vulnerable labor market will haunt the BOE.

The higher US inflation rate has refreshed the odds of a bumper rate hike by the Fed.

The GBP/USD pair is picking bids around 1.1500 after the release of UK inflation data. The headline inflation rate has been trimmed to 9.9% vs. the forecasts of 10.2% and the prior release of 10.1%. While the core Consumer Price Index (CPI) has remained in line with the estimates at 6.3%.

The price rise index has slipped lower but is still beyond the desired rate of UK central bank. The deadly duo of the higher inflation rate and Tuesday’s weaker Claimant Count Change data will continue to trigger more troubles for the Bank of England (BOE). The UK Office for National Statistics reported an increment in the number of jobless benefits claims by 6.3k against the expectations of a decline by 9.2k. While the Unemployment Rate scaled down to 3.6% in relation to the forecasts and the prior release of 3.8%.

One good news, which delighted the UK households was the upbeat Average Hourly Earnings data. The earnings data improved dramatically to 5.2% vs. the estimates of 5.0% and the prior release of 4.7%. Forced higher payouts to the households due to soaring price pressures were unable to get offset by lower-valued paychecks. Now an increment in households’ earnings will support them to cater to soaring energy bills and food prices.

On Tuesday, the cable nosedived after the release of the elevated US inflation rate. The headline US CPI which inculcates oil and food prices while the calculation landed at 8.3%, higher than the expectations of 8.1%. While the core CPI surges to 6.3% vs. the forecast of 6.1%. Federal Reserve (Fed) policymakers are continuously making efforts to cool down the red-hot inflation. All efforts went in vain as price pressures have become more vulnerable now.

This has strengthened the odds of a third consecutive 75 basis points (bps) rate hike by the Fed in its September monetary policy meeting. A rate hike of 75 bps will scale up the borrowing rates to 3.00-3.25% and will dent the growth prospects. Going forward, the US Retail Sales data will be a key trigger. The economic data is not showing any sign of improvement in the overall demand.

GBP/USD holds near 1.1500 after UK inflation data

GBP/USD manages to hold steady at around 1.1500 in the early European session on Wednesday. The data from the UK showed that the Core CPI edged higher to 6.3% on a yearly basis in August from 6.2% as expected, failing to trigger a significant reaction.


EUR/USD rebounds to near 0.9960, downside looks likely on hawkish Fed bets

EUR/USD has displayed a short-lived pullback around 0.9960, more weakness is imminent. Soaring core CPI indicates a sheer rise in durable goods prices. Eurozone bulls have weakened amid rising pessimism in the trading bloc.


USD/JPY reverses sharply below 144.00 as BOJ readies for intervention

USD/JPY is extending losses below 144.00, reversing sharply from daily highs of 144.96 on reports that the BOJ reportedly conducted a rate check in apparent preparation for currency intervention. 


Gold eyes 2022 low at $1,681 amid aggressive Fed rate hike bets

Gold price remains exposed to downside risks amid aggressive Fed tightening bets. Treasury yields continue to cheer hotter US inflation despite risk-aversion. XAU/USD could extend declines towards 2022 lows of $1,681.

Leave a Comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s