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Market News GBP/USD confronts obstacles near 1.1500; attention is on US Retail Sales

GBP/USD confronts obstacles near 1.1500; attention is on US Retail Sales

Prior to the release of U.S. Retail Sales data, the GBP/USD has detected moderate selling pressure near 1.1500. A single drop in the UK CPI is inadequate to declare an end to inflationary pressures. To restore order to the core CPI, the Fed is prepared for a full percentage point rate increase.

Alina Haynes
2022-09-15
413

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After recovering from 1.1526 during the New York session's late hours, the GBP/USD pair is inching moderately higher. As investors await the publication of U.S. Retail Sales data, the pair is anticipated to trade in a range. On a broader scale, the asset recovered strongly after Wednesday's double-test of a low of 1.1480. The pound bulls were bolstered by a fall in the United Kingdom's inflation rate, contrary to the market's anticipation of an increase.

 

The headline Consumer Price Index (CPI) statistics for the United Kingdom came in at 9.9%, which was lower than the forecast of 10.2% and the previous report of 10.1%. Policymakers at the Bank of England (BOE) are delighted with a fall in headline CPI during a period in which the economy is experiencing the tremendous pain of soaring energy costs. The negative reading is a breath of fresh air for the British economy. Previously, market professionals predicted a 13-14% inflation rate for the pound zone. Therefore, labeling the scenario as pricing pressure depletion would be inappropriate.

 

After a colossal rise, the US dollar index (DXY) has turned sideways. The DXY is anticipated to remain at elevated levels as the market has begun to anticipate a one percent rate hike at the September monetary policy meeting of the Federal Reserve (Fed). Despite tightening its monetary policy over the past six months, the Fed has returned to neutral. The cause of the Fed's apprehension is the core CPI data, which came up at 6.3%, which was higher than the 6.2% forecast.

 

Today's session will be completely dominated by the US Retail Sales figures. According to preliminary assessments, there has been no increase in retail demand. A stagnation in consumer demand is not favorable for the economy, but is indicative of a fall in consumer confidence in the economy.


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