- US inflation data with the possibility of having a great impact on the market.
- The pound continues to recover ground on all fronts.
- GBP/USD rises for the second day in a row.
GBP/USD rises again on Thursday ahead of key US data, driven mostly by dollar weakness, but also good momentum in the pound. The British bond market gives a breathing space that favors the currency.
Spotlight on US inflation, gilts calm?
The UK bond market seems to be giving positive signs at this time. The 10-year bond yield slips back to a two-day low of 4.26%. On Friday the Bank of England will complete its emergency purchase program. This implies that the days of volatility could continue, which would add noise to the pound crosses.
In the US, the focus is on what the September retail inflation data will be at 12:30 GMT. It is expected that the Consumer’s price index shows a rise of 0.2% and that the annual rate falls from 8.3% to 8.1%. The weekly report of unemployment subsidy requests will also come out.
The Inflation figures are key as they will shape the expectations of the Federal Reserve’s monetary policy. Minutes released on Wednesday showed signs of further gains, with FOMC members pointing to the need for tightening for a while and warning that it is riskier to inaction than to tighten too much.
A well-lower-than-expected inflation data could put pressure on the dollar, while a high one could fuel the dollar’s rally by fueling expectations of a more aggressive Fed.
The GBP/USD awaits inflation data trading on daily highs at 1.1165, close to Tuesday’s peak at 1.1178. In case of extending the rises, the next barrier of consideration appears at 1.1225, followed by 1.1300. In the opposite direction first support emerges at 1.1105, followed by 1.1055 and 1.1015.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
