fxs_header_sponsor_anchor

News

GBP/USD bears are holding up the bullish correction below 1.2050

  • GBP/USD bears are moving in near the lows of the day. 
  • The British Pound is under pressure due to a series of bearish data for the currency. 

GBP/USD is back under pressure in midday US trade after a series of data has kept a lid on attempts to correct the major sell-off that ensued following a round of negative data for cable. At the time of writing, GBP/USD is trading at 1.2005 and down 1.35%, pressured within the day's range of between 1.1989 and 1.2181, retreating from near two-week lows and on course for its sharpest one-day decline this month.

The pair has moved lower to break a seven-day rally against the euro, after a bigger-than-expected drop in UK inflation in January has led investors to believe that the Bank of England might curtail its interest rate hiking cycle. Inflation decelerated to an annual rate of 10.1% in January from 10.5% in December, compared to expectations of 10.3% in a Wall Street Journal survey of analysts.

Then to rub salt in the bull's wounds, the US Dollar climbed to a six-week high against a currency basket on Wednesday after hotter-than-expected US Retail Sales data last month that followed high Consumer Price Index data the prior day. Year-on-year, Retail Sales prices rose 6.4%. That was down from 6.5% in December but above economists' expectations of 6.2%Retail Sales rose 3% in January, easily topping the 1.8% estimate, the Commerce Department reported Wednesday.

''Today’s US Retail Sales data release support risks that the Federal Reserve will have to work harder to curtail demand and bring inflation under control,'' analysts at Rabobank said. 

Investors are starting to have second thoughts as to whether there will be cuts in 2023. Rates currently stand at 4.5% to 4.75% but Fed board members' median projection foresaw interest rates peaking at 5.1% this year. However, interest rate futures markets have still priced a peak above 5.2%, based on late Tuesday's prices.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.