- GBP/USD Hits Three-Day Highs Ahead of FOMC Minutes
- Pound rises to 1.3580 area as Pound strengthens.
- USD weakens despite stable yields and lower stock prices.
- Critical event ahead: FOMC Minutes at 19:00 GMT.
The GBP/USD gained momentum and rose to 1.3583, reaching the highest level since Friday. It is hovering above 1.3565, with a positive tone ahead of the FOMC minutes release.
The pound also strengthened against the euro during the US session. EUR/GBP earlier tested levels above 0.8400 on Wednesday and recently posted new daily highs below 0.8370.
Earlier on Wednesday, data showed that inflation reached the highest level in more than thirty years in the UK in January. The consumer price index (CPI) increased from 5.4% to 5.5%, slightly above expectations. The pound was relatively stable after the report.
In the US, retail sales rose 3.8% in January, the best month since April 2021. The dollar appreciated initially but then fell back. A different report showed that industrial production in January rose 1.4%, above the 0.4% market consensus.
The key event on Wednesday will be the release of the FOMC minutes from the last meeting at 19:00 GMT. “A March hike is pretty much a done deal, but markets will be looking for clues as to the likely pace of adjustment, as well as when a balance sheet exit might be seen and what might trigger outright asset sales vs. maturing securities,” he explained. analysts at Brown Brother Harriman.
Test levels above 1.3570
GBP/USD is trading around 1.3575. Momentum will favor the pound as long as it is above 1.3570, with a test of 1.3600 on the cards. The next resistance is located at 1.3620. On the other hand, a drop back below 1.3545 should point to further weakness in the pound, exposing next support at 1.3525.
Technical levels
Source: Fx Street
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