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GBP/USD – Inflation surprise sends Pound lower

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GBP/USD was deflated by softer than expected UK November inflation data

Cable dropped on Wednesday morning on softer than expected UK November inflation, losing around 0.4% after data release. Stronger than expected drop in consumer prices adds support to rate cut scenario, making pound less attractive, though latest comments from BOE’s deputy governor about keeping restrictive policy for some time, may partially offset impact from inflation report.

Fresh weakness is on track to fully reverse Tuesday’s advance (the pair was up 0.65%) and challenge pivotal supports at 1.2636/31 (converged 10/20DMA’s). Near-term bias is expected to remain with bulls while the these supports hold (daily studies show MA’s in bullish configuration and 14-d momentum in positive territory) and keep in play scenario for renewed probe through cracked Fibo barrier at 1.2919 (61.8% of 1.3141/1.2037) and possible acceleration towards pivotal 1.2800 zone. Read more…

GBP/USD – Inflation surprise sends Pound lower

UK inflation was lower than expected in November and the surprising release has sent the British pound lower today. Headline CPI eased to 3.9% y/y, down from 4.6% in October and below the consensus estimate of 4.4%. This marked the lowest inflation rate since September 2021. Core CPI rose 5.1% in November, down from 5.7% and below the market consensus of 5.6%. Significantly, both the headline and core readings declined in November on a monthly basis  – headline CPI came in at -0.2% and the core rate at -0.3% and both were lower than expected.

The sharp drop in inflation was driven by lower prices across the economy, including food, fuel, transport, recreation and clothing. The Bank of England will be encouraged by the significant decline in Core CPI, which excludes volatile items such as food and energy and is considered a better gauge of inflation trends than headline CPI. Read more…

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GBP/USD moves downward near 1.2720 ahead of UK CPI, PPI data

GBP/USD retraces its recent gains registered in the previous session, edging lower near 1.2720 during the Asian session on Wednesday. The GBP/USD pair receives downward pressure ahead of the slew of economic data releases from the United Kingdom (UK) on Wednesday.

UK Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Price Index for November are scheduled to be released later in the day. The monthly consumer inflation is expected to grow by 0.01% from flat 0.0% prior. However, the year-on-year report could show an ease at 4.4% against the previous reading of 4.6%. Read more…

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