Inflation has started to slow in the UK. However, market participants largely ignored these figures. The Federal Reserve’s monetary policy announcement will move the GBP/USD pairas reported by ING economists.
The slowdown in inflation is not so relevant now
“November reading showed lower-than-expected CPI month-on-month (0.4% vs. 0.6% expected), putting the year-over-year figure at 10.7% from 11.1% in October. Core inflation slowed from 6.5% to 6.3%.”
“Pound’s reaction to the data has been rather muted, which is not surprising given the wait-and-see approach ahead of today’s FOMC event risk and given that inflation figures do not suggest a different outcome for tomorrow’s Bank of England meeting.”
“Today, GBP/USD will move mainly on the reaction to the FOMC. We expect a correction below 1.2300, but the risks of a negative USD reaction are not negligible. In that case, the 1.2500 level could be tested. before the Christmas holidays.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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