GBP/USD stabilizes below 1.3400 as traders digest BoE policy update and US inflation data
The GBP/USD pair halted the previous day’s decline from near the mid-1.3400s and the highest level in almost two months, although it struggled to attract significant buyers during the Asian session on Friday. Spot prices are currently trading around the 1.3380-1.3385 area, up just 0.05% on the day, amid mixed signals.
The British Pound (GBP) is drawing support from a hawkish interest rate cut by the Bank of England (BoE) on Thursday, which in turn is seen as a major factor acting as a tailwind for the GBP/USD pair. As expected, the Bank of England’s Monetary Policy Committee voted 5 to 4 in favor of a 25 basis point cut to 3.75%. However, the close split in votes revealed differences within the committee, especially after this week’s inflation surprise. This in turn forced investors to reduce their expectations for more aggressive easing next year. Read more…
GBP/USD stabilizes as weak CPI pressures dollar, BoE stance supports sterling
The GBP/USD pair rose during the North American session on Thursday following the release of a benign US inflation report and a “tight” interest rate cut by the Bank of England. The pair is trading at 1.3410, up 0.28% after reaching a daily low of 1.3340.
The US Bureau of Labor Statistics (BLS) revealed that the US Consumer Price Index rose 2.7% year over year in November, down from 3% in September. The data revealed that core inflation decreased from 3% to 2.6%. Although the result is positive, economists warned that the 43-day U.S. government shutdown made it impossible for workers at the Bureau of Labor Statistics to collect some of the data they normally compile for the report. Read more…
