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GBP/USD to Waver amid Pared Back BoE Hike Bets?

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Pound US Dollar (GBP/USD) Exchange Rate Flat amid Disappointing UK CPI Print

The Pound US Dollar (GBP/USD) exchange rate is trading narrowly today, following an underwhelming slate of UK inflation data.

At the time of writing, GBP/USD is trading at around US$1.2180, showing little movement from the morning’s opening rates.

Pared Back BoE Bets to Cap GBP?

The Pound (GBP) could see choppy trade over the rest of today’s session, following this morning’s consumer price index release.

Both core and headline inflation printed above forecasts, with the latter holding at 6.7% and the former cooling to 6.1%.

However, the movements appear to have done little for Sterling’s fortunes, with the stickiness failing to spark renewed Bank of England (BoE) tightening bets. Because of this, the Pound appears unable to gain ground against its peers.

Tomorrow, the Pound could lack direction during the day’s trade, as the data calendar lightens. With little for investors to go on, the focus could remain on the UK’s economic outlook, or the potential for further interest rate hikes.

Additionally, the lack of data could leave the increasingly risk-sensitive Pound vulnerable to shifts in market mood.

If trading conditions turn bearish, GBP exchange rates could weaken against safer currencies such as the US Dollar.

Fed Speeches to Boost USD?

Over the rest of today’s session, the US Dollar (USD) may remain trading within narrow boundaries. With impactful data releases in short supply, the lack of impetus could lead to little in the way of directional trade.

Towards the end of the session, a trio of Federal Reserve officials are scheduled to speak. If they show something of a hawkish consensus amongst the central bank, the US Dollar could strengthen. If the door is opened to further tightening, renewed rate hike bets could bring additional tailwinds.

Tomorrow, the latest initial jobless claims data could provide some direction. Economists forecast an uptick in jobless claims for the week ending October 14th, which could weigh on USD exchange rates somewhat.

An increase in claims could be indicative of slack in the US labour market, which would prompt pared back hike bets.

In the evening, Fed Chair Jerome Powell is scheduled to deliver a speech. If he strikes a hawkish note and indicates room for further interest rate hikes, the US Dollar could strengthen against its peers.

Elsewhere, a tepid market mood could strengthen the safe-haven US Dollar, as investors may look for safer investments amid continuing tension in the Middle East.

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