GBP/USD whipsaws around 1.2800 as UK inflation favor BoE hawks, focus on Fed Chair Powell – by anilpanchal7 GBPUSD Inflation BOE Fed RiskAversion
UK Consumer Price Index for May rose past 8.4% market expectations to reprint the 8.7% YoY figure. That said, the Core CPI, which excludes volatile food and energy items, matches analysts’ estimations to register a stagnant increase in inflation, with 6.8% YoY numbers.
With the upbeat UK inflation numbers, as well as the previously published strong British jobs report, the Bank of England appears all set to announce another increase in its benchmark interest rate on Thursday. Preparations for the same seem to have favored the GBP/USD buyers of late. However, the US Dollar’s ability to grind higher for the fourth consecutive day, despite recent inaction, challenges the GBP/USD pair buyers even as the UK inflation favors BoE hawks. stays defensive around 102.60 while keeping the four-day uptrend without marking keen interest to move toward the north. The US Dollar’s latest strength could be linked to hawkish comments from the Fed policymakers, mainly the nominees, and strong US housing data.
Against this backdrop, S&P500 Futures pause the week-start retreat from the highest levels in 14 months, mostly inactive near 4,436 by the press time, whereas the US 10-year Treasury bond yields pare Tuesday’s losses around 3.74% at the latest. Having witnessed the initial market reaction to the UK inflation data, the GBP/USD pair traders should keep their eyes on the risk catalysts while waiting for the bi-annual testimony of Fed Chair
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