12 September 2024, GBP/USD
An event to look out for today:
15:30 GMT+3. USD - Number of Initial Jobless Claims
GBPUSD:
GBP/USD remains under pressure, trading near 1.3030 as the market reacted to the latest US inflation data. Economic activity data released during the European session seems to have put additional pressure on the pound.
While core inflation fell, the annualised core CPI, which excludes volatile food and energy prices, was unchanged at 3.2% in August, in line with market expectations. However, on a month-on-month basis, the CPI and core CPI rose 0.2 per cent and 0.3 per cent respectively, exceeding market forecasts. This data caused traders to reduce the probability of a rate cut by the Federal Reserve by 50 basis points, and the market now estimates the probability of a 25 basis point rate cut at 85%.
Weakening of the British pound was fuelled by the reported weak release of Gross Domestic Product (GDP) data during the European sessions. Despite this, leading indicators point to a potential recovery in UK economic activity, suggesting that the Bank of England is unlikely to cut rates by more than 50 basis points by the end of the year, which may provide some support for the GBP, but pressure from the USD on the GBP may outweigh this support.
Trading recommendation: We follow the level of 1.3005, if it is fixed above we consider Sell positions, if it rebounds we consider Buy positions.
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