GBP/USD: British Pound Sterling Crosses 100-Day MA to Hit 10-Week High Near $1.26The Bank of England buoyed the currency higher after Governor Bailey dampened hopes of rate cuts in the near future.
- The GBP/USD pair advanced moderately in Friday’s early deals, peeking over the $1.2570 level for the first time in 10 weeks. The upbeat mood was largely fueled by the Bank of England’s interest-rate stance, telegraphed earlier this week. The pound moved higher against other players on the forex board.
- Bank of England Governor Andrew Bailey reiterated the UK policymakers’ commitment to keeping interest rates higher for longer, much like their US counterparties. It was “far too early to be thinking about rate cuts,” Bailey said at a hearing before the British parliament's Treasury Select Committee.
- Technically, sterling bulls have a reason to be thankful with the UK currency emerging above the mid-term 100-day moving average. The 50-day and the 200-day lines are already under. Any technical analysis book will tell you this means that a positive trend may be shaping up. May be = DYOR.
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GBP/USD: Sterling Ricochets Off 100-Day MA to Float at $1.24 in 3rd Straight Down DayThe sterling shot up to $1.2505 earlier in the week only to get a rejection from mid-term resistance as technical tools came into play.
- The GBP/USD pair was pushed off by mid-term resistance at $1.2505 where the 100-day moving average laid flat. Now, on pace for a third straight day of declines, the sterling has slipped around 0.9% to change for roughly $1.2400 as bulls have retreated in the face of a stronger dollar.
- That said, the dollar’s mid-week pullback is halfway recovered. On Wednesday, the greenback sold off heavily across the board after US inflation ticked lower than expected for October. The 3.2% annual price growth surprised traders who now believe the Federal Reserve’s rate-hike campaign will be put on hold.
- In that context, sterling's immediate next move is likely to unfurl in a quiet market environment. Beside next week’s Fed minutes on Wednesday, there would be little economic data to excite investors. America will be celebrating Thanksgiving Day on Thursday and US stocks won’t be open, pumping a lot of the liquidity out of asset classes.
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GBP/USD: Sterling Finds Support at $1.22 Post GDP Data, Snaps 4-day Losing StreakThe UK economy flatlined in the third quarter, latest GDP data showed, suggesting a possible downturn after Q2 data came in positive.
- The GBP/USD pair snapped a four-day losing streak on Friday, after it dived to levels near $1.22. Sterling bulls picked up momentum and managed to close the trading session fairly unchanged on the day at $1.2230. The downturn accelerated a day earlier when the UK posted a worrying report.
- Gross domestic product for the third quarter arrived unchanged from the previous three months. In the June quarter, the UK economy expanded by 0.2%, raising expectations that this quarter will extend Britain’s positive growth. But the stagnating number told another story – high borrowing costs are starting to bite.
- The Bank of England is keeping interest rates at 5.25% after it broke a string of 14 straight rate hikes in September. On the other hand, analysts are calling for more inflation pressures ahead. Prices across the UK economy rose 6.7% in September, a far cry from the 2% target.
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GBP/USD: Sterling Reverses Upside Swing to Drop Under $1.23 Ahead of GDP DataThe British currency enjoyed strong buying momentum last week when and Monday when it shot up to near $1.25.
- The GBP/USD pair slipped to start Tuesday dealmaking, moving from a daily peak of $1.2340 to a current rate of exchange near $1.23. Previously, on Monday, the pair shot up to a three-week high of $1.2430, hit the 200-day moving average and reversed course in a sharp decline.
- The UK’s currency saw increased optimism from traders last week when the US published its monthly jobs report. Turns out, America’s employers added fewer-than-expected workers in October. The figure landed at 150,000, missing expectations for 180,000 new hires.
- With that said, a new raft of economic data is coming. The UK’s gross domestic product number is slated for a Friday release. It’s a three-fold report with monthly, quarterly, and annual figures. More importantly, quarter-on-quarter growth is set to have contracted by 0.1% from a previous expansion of 0.2%. Annual growth for the September quarter is pinned at 0.5%, a step back from 0.6%.
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GBP/USD: Pound Seeks to Regain $1.22 as UK Shop Price Inflation Hits 1-Year Low at 5.2%For a fifth straight month, the inflation gauge has been retracting, reaching its lowest point since August 2022.
- The GBP/USD pair moved higher by about 50 pips early on Tuesday to trade just under the $1.22 handle after the British Retail Consortium said UK shop inflation has slipped further. Falling to its lowest rate in a year, shop inflation hit 5.2% in September, the fifth straight drop for the price-growth measure and a bottom last seen in August 2022.
- The monthly data pointed out that declining prices of homegrown food were among the biggest contributors to the reversing inflation trend which flared up a cost-of-living crisis in many UK households. A year ago, headline inflation in the UK peaked at a 41-year high of 11%. Since then, it has been dropping continuously to a September clip of 6.7%.
- The British sterling has consolidated against the dollar, trading in a range-bound mode within the $1.24 to $1.20 price frame for the past month. Looking ahead, forex markets are likely to face turbulence with the upcoming Federal Reserve interest-rate update on Wednesday and the US nonfarm payrolls report on Friday.
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GBP/USD: Sterling Drops 1.2% to Revisit $1.2150 as Dollar Reverses Early-Week LossesThe dollar turned sharply higher on Tuesday despite markets staying confident the Federal Reserve won’t bump rates further this year.
- The GBP/USD pair slipped 1.2% on Tuesday and early Wednesday after the dollar surprised forex bros with a sharp reversal. The greenback cleaned up all of its early-week losses and the sterling’s advance to a weekly high of $1.23 turned into a negative weekly performance.
- The exchange rate hovered just under the $1.2150 mark in first deals today as money managers braced for an upcoming array of economic data out of the US. Tomorrow, the preliminary third-quarter GDP report will be released. Hopes are pinned at a 4.2% quarterly growth.
- Further, Friday brings the Fed’s preferred measure of inflation – the PCE. Short for Personal Consumption Expenditures, the print should ideally land at 3.7% or below. On interest rates, the general consensus now predicts that the Fed could decide to skip a hike in December and call for one in January.
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GBP/USD: Sterling Rises Above $1.22 on Flatlining UK Inflation at 6.7% in SeptemberElevated oil prices contributed to the upside, but falling food prices weighed to the downside. Final outcome: flat rate.
- The GBP/USD pair moved higher early Wednesday in the wake of the latest UK inflation report. The British currency crossed $1.22, up from a session low of $1.2160, after the rate of inflation for September came out at 6.7%, unchanged from a month ago.
- On the one hand, rising oil prices lifted the benchmark. But on the other hand, falling food prices eased the pressure, lowering the inflation gauge. Economists had previously projected September’s annual pace of price growth would arrive at 6.6%. The near miss is likely what drove up demand for sterling.
- The Bank of England is now faced with the decision whether to hike interest rates further in an effort to stamp out stubborn inflation. It skipped an interest-rate increase last time, breaking a string of 14 straight hikes. The central bank’s next meeting is slated for Nov. 2 and markets are pricing a nearly 80% chance of a no-hike decision.
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GBP/USD: Pound Sterling Seeks Direction Ahead of Fed Minutes, Trades Near $1.2220The FOMC minutes are expected to reveal key insights into the Fed’s projected timeline of interest rates.
- The GBP/USD pair whipsawed to start the day after gaining to a weekly high of $1.2275. The pair is looking to log a five-day winning streak as investors shift their attention to a mosaic of data, pending release in the next couple of days. Both sides of the exchange rate are likely to add fuel.
- On Wednesday, the Federal Reserve will release its minutes from the three-weeks-ago meeting when the US central bank skipped a rate hike but broadcasted its new message: interest rates will stay higher for longer. To that end, Fed officials are not likely to hike rates at their next meeting Oct 31 – Nov 1.
- Adding to the string of data, the UK will release its GDP report in the early UK morning on Thursday. The print will be followed by the latest US inflation data. The CPI figure is expected to show price pressures eased to 3.6% in September, down from 3.7% in August.
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GBP/USD: Pound Stages Modest Rebound to Top $1.21 Ahead of Key US Jobs DataThe British currency has been struggling to overturn its downward trend. Can the jobs report give it a boost tomorrow?
- The GBP/USD pair staged a mild recovery on Wednesday, leaping from $1.2040 to $1.2130 as currency traders show optimism for the pound ahead of a key jobs report tomorrow. Early on Thursday, the pair is walking a fine line, swinging from red to green.
- Forex bros are already positioning their portfolio to meet tomorrow’s data. The US is gearing up to unveil how many new jobs were added in September and consensus stands at 163,000. The projected number is less than the 187,000 new jobs created in August.
- How could the nonfarm payrolls affect the GBP/USD? On the one hand, if the actual number aligns with the consensus call, or hits lower, markets will get a relief that the economy is cooling as intended. And weakness in the US dollar may follow as a result. On the other hand, a hot report that overshoots estimates could be a signal for more of those interest rate hikes by the Fed, that have fueled the greenback.
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GBP/USD: Sterling Extends Slump to Fresh 6-Month Low Below $1.2230 after BoE SurpriseThe Bank of England bucked the trend in its rate increases last week after 14 consecutive raises. The news keeps hammering Sterling bulls.
- The GBP/USD kicked off the new week with a modest drop, adding to the sharp selloff witnessed last week. The British pound hit a six-month low under $1.2230 early on Monday and presently hovers just around that watermark. The UK’s central bank is to blame.
- The Bank of England’s decision on Thursday to end its streak of 14 straight interest-rate increases put fresh pressure on the pound. If the UK’s borrowing costs are starting to move sideways, the British pound would be less attractive as an asset worth holding. How did that happen?
- British inflation in August unexpectedly dropped to 6.7%, way below the 7% consensus and also below the 6.8% pace a month prior. And while the BoE skipped this month’s hike, policymakers had previously signaled they were likely to take it up by 25 basis points.
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GBP/USD: Sterling Knocked to 3-Month Low as UK Inflation Falls to 6.7%The Bank of England could now take a breath and reassess the situation as traders put interest rates in the rearview mirror.
- The GBP/USD pair posted a sharp drop in the early UK morning on Wednesday. News came out that British inflation unexpectedly dropped to 6.7% from 6.8% in July. The price-growth print bucked the trend that’s shaped up in the US where inflation creeped up on the back of rising oil costs.
- With UK inflation posting an impressive decline across the board, the GBP/USD tumbled more than half a percent this morning, or roughly 60 pips, to trade at a three-month low of $1.2320, from a session open of $1.2392. Since mid-July, the British currency has erased more than 6% from its valuation against a stronger US dollar.
- The pound selloff is a signal that forex speculators are weighing the Bank of England’s moves and have figured out that it probably won’t need to hike rates much higher. Presently, UK interest rates are sitting at 5.25% and the central bank meets tomorrow. Expectations are set for another increase of 25 basis points.
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GBP/USD: Sterling Stays Muted Near $1.25 as UK Wage Growth Climbs 7.8%Wages logged a record pace of growth and beat lowering inflation. But the pound didn’t catch on the good news.
- The GBP/USD pair was largely unfazed early on Tuesday after the UK published its latest economic report. UK wages, the Office for National Statistics said, rose by 7.8% in July, year-over-year. It was the steepest pace of growth since record-keeping began in 2001.
- The British pound sterling didn’t react to the news, except for a few short blips immediately after the report was released. The UK currency stayed muted near $1.25 – a consolidation area that’s been sheltering the exchange rate for the past couple of trading sessions.
- Still, it’s good news for the UK economy - average wages are rising faster than stubborn inflation. The data brings a much-needed sigh of relief in a monthslong struggle under the weight of rising consumer prices. In July, inflation in the UK hit 6.8%, down from 7.9% in the month prior.
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GBP/USD: Sterling Slides Below $1.25 in Broad Dollar Push, Hits 3-Month LowThe greenback is on the offensive again as markets are weighing prospects of another rate hike at the Fed’s September meeting.
- The GBP/USD pair is down for a third day in a row Thursday as forex bros are anticipating another interest rate bump out of the Federal Reserve later this month. The British pound dropped to a three-month low near $1.2450 while the dollar was busy stripping valuations across the board.
- The EUR/USD is barely holding above the $1.07 mark as the mighty buck is approaching a double bottom near $1.0650. The USD/JPY is also in line with the dollar’s strength as the pair is rocketing to levels near ¥148.00, posing increased challenges for the Bank of Japan and its rock-solid loose-monetary policy.
- The Fed is gathering on 19-20 September for its regular monetary policy meeting. And given that last month’s jobs report indicated a cooling economy, but not exactly, some market participants are expecting an interest rate increase. In such a scenario, the dollar is likely to pull ahead.
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GBP/USD: Sterling Sinks Below 100-Day Moving Average as Falling Inflation Fails to Boost DemandUK shop price inflation hit 6.9% in August, notching its lowest level in almost a year. Traders kept piling their short positions.
- The GBP/USD pair slipped early on Tuesday, floating near $1.26 after the latest batch of economic data came out of the UK. The country’s shop price inflation fell to 6.9%, its lowest since October 2022 as food cost pressures eased up a bit. The rate was down from 8.4% in July.
- Traders didn’t react bullishly on the sterling. Instead, they went mild and retreated from their long positions, driving a drop from a daily high of $1.2632 to a session low of $1.2595. The British currency has been getting punished by a stronger dollar for the past two months, sliding from $1.31 to current market prices.
- Adding to bearish pressures, the GBP/USD crossed the 100-day moving average, indicating the weakness of the pound may persist for the short to mid term. Further down the road, the exchange rate is staring at the 200-day moving average, currently resting at $1.24 – a level last seen in June.
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GBP/USD: Sterling Tops $1.28 on Upbeat UK Data, Broad US Dollar RetreatThe currency pair is just at the 50-day moving average intersection, pressing higher for a second consecutive day.
- The GBP/USD pair advanced early on Tuesday, gaining some 50 pips to overtake the $1.28 threshold. Positive news out of the UK and a general dollar bearishness contributed to the upside. Traders are now keen to try and top the 50-day moving average, currently standing as an immediate resistance.
- The UK public sector borrowing for July rose less than expected, new data showed. The figure landed at £4.3bn last month, well below the £6bn forecast by the Office for National Statistics. The upbeat report lifted expectations that the chancellor could consider tax cuts before the next general election.
- Broadly in forex markets today, the dollar is showing signs of weakness, helping rival currencies recover some of the losses from last week. On Friday, Federal Reserve Chair Jay Powell will likely stir the markets with a fresh bout of volatility as he gives a speech at the Jackson Hole symposium.
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GBP/USD: Sterling Shoots Higher on Surprise UK Inflation Drop to 6.8% in JulyIt’s the slowest price growth for the UK since February last year but core inflation remained stubbornly unchanged, complicating the Bank of England’s work.
- The GBP/USD advanced in early UK morning after the latest inflation report came in just as expected. Headline inflation for July cooled significantly to an annual rate of 6.8%, down from 7.9% the previous month. The pound gained roughly 70 pips on the news, reaching a session high of $1.2770.
- Despite the headline inflation retreating, core inflation stayed high. The core consumer price index, which excludes more volatile items like energy, food, and alcohol, remained elevated at an unchanged pace of 6.9%. What does that mean for the UK economy?
- The divergence between the two inflation gauges signals some friction between consumer prices and the Bank of England’s actions to cool the economy by interest-rate lifts. In that context, the UK’s central bank might be in for another round of brainstorming until they figure out how to stamp out entrenched price pressures.
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GBP/USD: Sterling Boosted as UK Economy Grows 0.2% From Previous QuarterThe GBP/USD picked up momentum to top $1.2700 after the positive report, which surprised even the Bank of England.
- The GBP/USD pair shot higher in early morning UK time after the Office for National Statistics published the latest GDP figures. Amid a series of jumbo-sized interest rates, consumer spending proved robust, pushing the UK economy to expand by a modest 0.2% for the June quarter, compared with the previous three months.
- Sterling bulls charged ahead, raising the UK currency’s valuation against the dollar to a session high of $1.2730, up some 60 pips on the day. With that said, the GBP/USD pair is still in its summer lows after diving from $1.3100 in mid-July. Short-term bottom sits at $1.2638 hit in early August.
- The positive GDP data surprised even the Bank of England. The UK’s central bank had forecast a 0.1% expansion between the first two quarters. On the bright side, policymakers noted that there is no reason to worry about recession. Rather, a stagnation (slim to no growth) might linger on for the next couple of years.
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GBP/USD: Dollar Bulls Are Back After Minor Hiccup Over US Credit Rating DowngradeFitch Ratings cut its US debt rating but that couldn’t keep dollar buyers away. The GBP/USD is down again.
- The GBP/USD pair is moving sideways after a short-lived blip to the upside on Tuesday. The exchange rate jumped 0.1% to just over $1.28 but the pound struggled to hold on to the gains and is now trading near $1.2790 as dollar bulls are pumping the greenback across the board.
- Behind the casual slip in the dollar was Fitch Ratings’ decision to cut its US credit rating to AA+ from AAA. Back in May, the agency put America’s rating on negative watch when debt-ceiling issues threatened to push the country into an economic collapse.
- Fitch’s move to downgrade was prompted by an “expected fiscal deterioration over the next three years,” an erosion of governance and looming debt concerns. The US Treasury disagreed with that gloomy outlook, calling the downgrade "arbitrary and based on outdated data."
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GBP/USD: Sterling Rises to $1.29 as Dollar Retreats Ahead of Federal Reserve MeetingForex markets are in for a treat today with Jay Powell taking the stage for the Fed’s interest rate decision.
- The GBP/USD pair advanced moderately early on Wednesday as forex traders prepared for the Fed’s regular monetary policy meeting. In other words, it’s time to find out the latest interest rate decision from the US central bank. Expectations are pinned at a quarter-point rate hike to 5.50%.
- Note that this rate hike may very well be priced in as the Fed wants to make its intentions known ahead of time to avoid a market tantrum. What’s not priced in is the future. Any hint that the Fed is looking to keep rising rates and keep them higher for longer will rattle asset classes across the board.
- Markets are now in a period of disinflation, meaning price pressures are subsiding, with the latest CPI report at a 3.0% annual rate. Historically, these cycles have been unfavorable to stocks as nearly every one since the 1950s has been followed by a market-battering recession.
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GBP/USD: Sterling Drops Under $1.30 as UK Inflation Hits 15-Month Low at 7.9% in JuneThe figures speak for themselves: a 7.9% inflation for June came in below estimates for 8.2% and well below May’s 8.7%.
- A surprise drop in the rate of UK inflation sent the sterling lower on Wednesday. The GBP/USD pair tumbled to its lowest level in a week, as the British pound lost more than 1% to hit a session low of $1.2870. The exchange rate erased some of the losses early on Thursday to float near $1.2900 to $1.2950.
- Annual inflation in the UK for June arrived at an optimistic 7.9%. The reading was the lowest spotted in 15 months and came in well below expectations for an 8.2% rise. It was also significantly below May’s consumer price growth of 8.7%. What happens now with rate hikes?
- Traders are eyeing the next Bank of England meeting slated for August 3. Some are expecting to see another 25 bps bump to lift the benchmark rate from 5% to 5.25%. Prior to yesterday’s inflation data, markets were pricing in a 50 bps increase in an effort to stamp out stubborn inflation.
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