GBP/USD exchange rate dips ahead of high impact US data
The pound US dollar (GBP/USD) exchange rate is trending broadly lower this morning as markets await the publication of the US’s latest core PCE price index.
At the time of writing the GBP/USD exchange rate is trading at around $1.3379, down roughly 0.2% from this morning’s opening rate.
US dollar (USD) to firm following domestic data?
The US dollar (USD) is trading in a wide range this morning, rising against several of its counterparts but faltering elsewhere, ahead of the publication of some significant US data.
This afternoon will see the publication of the latest core PCE price index, which stands at the Federal Reserve’s preferred gauge on inflation.
The index is forecast to show a slight uptick in last month’s reading, with the data expected to rise from 2.6% to 2.7%.
This week, USD has come under significant selling pressure as markets are pricing in another 50 basis-point interest rate cut from the Federal Reserve.
However, should this afternoon’s inflation data confirm a rise in the Fed’s preferred inflation index, USD could surge against its counterparts on the back of trimmed 50bsp rate cut bets.
Should the index differ from expectations however, USD sentiment will likely remain low and could see the ‘greenback’ close the week on the back foot.
Pound (GBP) to be buoyed by upcoming data?
The pound (GBP) is struggling to find a clear direction this morning and is fluctuating against the majority of its peers.
GBP investors may be reluctant to place any aggressive bets ahead of some mid-tier economic data, scheduled for release later today.
The Confederation of British Industry’s (CBI) latest distributive trades survey is expected to report an increase this month, with the index anticipated to rise from -27 to -19.
If the data meets expectations, and confirms the highest reading in a three month period, Sterling could strengthen against its peers.
However, should the index, that measures sales compared to the previous year, print to the downside, GBP exchange rates could lose ground amid a lack of any further economic drivers.
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