GBP/USD extends the upside above 1.2700, focus on UK-US PMI data

FXStreet
Updated May 23, 2024 06:29
Mitrade

■GBP/USD trades on a stronger note around 1.2720 in Thursday’s early Asian session. 

■The FOMC Minutes showed the participants worried over the lack of progress on inflation towards its 2% target. 

■The UK CPI rose by 2.3% YoY in April, compared to 3.2% in March, above the consensus of 2.1%. 


The GBP/USD pair extends the rally near 1.2720 during the early Asian section on Thursday. The uptick of the major pair is bolstered by the hotter-than-expected UK CPI inflation data, which slashed June rate cut bets from the Bank of England (BoE). Later in the day, the flash Purchasing Managers Index (PMI) reports from the UK and US will be released. 

The minutes from the recent policy meeting of the Federal Open Market Committee (FOMC) released Wednesday showed that the officials expressed more concern about inflation as it was more stubborn than expected to start in 2024, making the Fed lack the confidence to move forward on interest rate cuts. Fed Chair Jerome Powell highlighted last week that the Fed will “need to be patient and let restrictive policy do its work” as inflation remains high. Investors see nearly 60% odds of first-rate cuts from the Fed in September, according to the CME FedWatch Tool. 

On the other hand, inflation in the UK cooled down less than expected in April, prompting investors to lower their bets on the BoE rate cut next month. The nation’s Consumer Price Index (CPI) rose by 2.3% YoY in April, compared to 3.2% in March. This figure registered the lowest level since July 2021, the Office for National Statistics reported Wednesday. The hotter UK CPI inflation boosts the Pound Sterling (GBP) and creates a tailwind for the GBP/USD pair. The markets slashed the possibility of a BoE rate cut in June to just 18%, down from 50% on Tuesday.


GBP/USD


Overview
Today last price 1.272
Today Daily Change 0.0011
Today Daily Change % 0.09
Today daily open 1.2709
 
Trends
Daily SMA20 1.2569
Daily SMA50 1.2584
Daily SMA100 1.2633
Daily SMA200 1.2541
 
Levels
Previous Daily High 1.2727
Previous Daily Low 1.2686
Previous Weekly High 1.2712
Previous Weekly Low 1.2509
Previous Monthly High 1.2709
Previous Monthly Low 1.23
Daily Fibonacci 38.2% 1.2711
Daily Fibonacci 61.8% 1.2702
Daily Pivot Point S1 1.2688
Daily Pivot Point S2 1.2667
Daily Pivot Point S3 1.2647
Daily Pivot Point R1 1.2729
Daily Pivot Point R2 1.2748
Daily Pivot Point R3 1.277

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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