GBP/USD aptly portrays pre-BoE anxiety near 1.2630 immediate hurdle on “Super Thursday” – by anilpanchal7 GBPUSD BOE Fed RiskAversion Inflation
E) monetary policy meeting. With this, the Pound Sterling pair remains unchanged on a day, printing three-day indecision of traders, heading into the London open on “Super Thursday”.pair rose to a fresh high since April 2022 the previous day following downbeat US inflation data. However, the pre-BoE consolidation joined the US Dollar’s corrective bounce to prod the GBP/USD pair’s latest moves.
Earlier in the day, an improvement in the UK’s RICS House Price Balance for April, to -39% from -43% and -40% expected, joined hawkish forecasts from the UK think-tank National Institute of Economic and Social Research to favor the GBP/USD buyers. “NIESR estimated annual consumer price inflation will be 5.4% in the final quarter of 2023 - well above forecasts from the Bank of England and the government's budget watchdog,” reported Reuters. prints mild gains around 101.45 after posting the biggest daily loss in a week as the US Consumer Price Index eased to 4.9% YoY for April versus market expectations of reprinting the 5.0% mark, being the first below 5.0% print in two years.
Given the above 10% UK inflation and the Fed’s dovish rate hike, the GBP/USD is likely to remain firmer even if the Old Lady, as the BoE is informally known, fails to suggest strong rate hikes for the future. With this in mind, Goldman Sachs said, “UK inflation on track to fall rapidly, helped by cooling global energy prices was unlikely to drop enough to meet the BoE’s 2% target.”
Moving forward, GBP/USD traders will keep their eyes on the BoE’s quarterly monetary policy report as the Old Lady’s 0.25% rate hike expectations appear mostly priced in. In doing so, the British economic growth and inflation forecasts, as well as the central bank’s peak Terminal Rate, will be closely observed for clear directions.Apart from the BoE-linked moves, the Pound Sterling pair will also be affected by the US Producer Price Index for April, expected to ease to 2.4% YoY.
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