Events to watch out for today:
09:00 EET. GBP – Consumer Price Index
15:30 EET. USD – Consumer Price Index
GBPUSD:
The Pound-Dollar pair is attracting some sellers during Wednesday’s Asian session, although it lacks support and remains within the previous day’s wider trading range. Spot prices are currently trading near 1.2200, down 0.20% for the day, as investors look ahead to the release of important Consumer Price Index (CPI) data from the UK and the US before starting to position for the next leg of directional movement.
The crucial CPI report will impact the Bank of England (BoE) and Federal Reserve (Fed) interest rate outlook, which in turn will play a key role in determining the next leg of directional movement for the GBP/USD pair. Ahead of key data releases, the risk of stagflation – a combination of high inflation and weak economic growth – and concerns over the UK’s fiscal situation are undermining the British Pound (GBP).
In addition, the recent jump in UK borrowing costs is contributing to the deterioration in sentiment around the British Pound and is a key factor weighing on the GBP/USD pair. The US Dollar (USD), on the other hand, is languishing near the weekly low reached in response to the release of lower US producer prices on Tuesday and is helping to limit the decline in spot prices. At the same time, the Fed’s hawkish attitude acts as a tailwind for the USD.
Trading recommendation: Trade mainly with Sell orders from the current price level.
Origin: FreshForex
