Yahoo Finance GBPUSD Moves Flat Ahead of Inflation Data Update
The GBPUSD pair on Tuesday made some headway against US dollar reaching as high as 1.3492 however stiff resistance and lack of triggers pushed the pair back to 1.3400’s range by Asian market hours on Wednesday. Momentum gained from BOE member’s speech in Parliament was short lived and pair is expected to move range bound ahead of inflation data scheduled to release later today. After several days of thin data, the GBP sees an active Wednesday with a slew of data dropping early at 08:30 GMT, kicking off with the Retail Price Index, which is expected at 3.4% (last 3.3%) for the YOY data. A smattering of Produce Price Index figures also drop, with the PPI – Input figures for April expected at 1.0% (last -0.1%). The update with high impact for today will be the UK’s CPI figures, with the YOY Core Consumer Price Index for April expected at 2.2%, a slight contraction from the previous reading of 2.3%.
GBPUSD On the Backfoot
Investors are also on look out for inflation data from US and FOMC minutes in US markets for clues on inflation growth. During his speech in UK’s parliament yesterday BOE Governor Carney’s speech was dovish well in line with public expectations. Governor Mark Carney testified on the inflation and economic outlook before the Parliament’s Treasury Select Committee and during this speech he mentioned that “it is right to wait for more data” and “that households, businesses understand that rates are likely to rise at a gentle pace” thereby signaling that the Bank of England is data-dependant for further rates hikes and it will closely watch all inflation data.
This cautious stance and comment by Carney can be viewed as major reason for lack of triggers or as major hurdle that prevented Sterling from breaking through 1.349 ceiling during yesterday’s session. US dollar gained some momentum on Tuesday despite silent macro calendar and US treasury yields made some headway. Expected support and resistance for the pair are at 1.3390 / 1.3355 / 1.3320 and 1.3450 / 1.3490 / 1.3520 respectively.
This article was originally posted on FX Empire
