GBPUSD:
U.S. producer prices unexpectedly fell in April as the cost of services fell the most since 2009. The Bureau of Labour Statistics on Thursday released data that the
US Producer Price Index (PPI) rose 2.4 per cent in April, down from 2.7 per cent previously. This figure was weaker than market expectations of 2.5%. In addition, initial jobless claims in the US for the week ending 10 May were 229 thousand, compared to the previous week’s 229 thousand (revised from 228 thousand). This value was in line with initial estimates.
Swap markets priced in the first Fed rate cut of 25 basis points (bps) at the September meeting and expect two more rate cuts before the end of the year. Some analysts believe policymakers may wait until December.
Favourable UK Gross Domestic Product (GDP) data suggests the UK’s economic health is robust, dampening hopes of aggressive monetary policy easing by the Bank of England (BoE). This, in turn, provides some support for the British pound against the US dollar.
Trading recommendation: BUY 1.3350, SL 1.3250, TP 1.3550
Origin: FreshForex
