News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Heads Up:🇦🇺 Ai Group Services Index (APR) due at 22:30 GMT (15min) Previous: 58.7 https://www.dailyfx.com/economic-calendar#2021-05-06
  • The US Dollar is still struggling against most ASEAN currencies. USD/SGD remains downside-focused despite recent gains. USD/THB is eyeing a triangle. USD/IDR and USD/PHP may point lower. Get your market update from @ddubrovskyFX here:https://t.co/6Nvvmz8h6d https://t.co/dX69A341oc
  • US Dollar Outlook: USD/CAD Volatility to Rise, Jobs Data Looms -via @DailyFX Link to Full Analysis: https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2021/05/06/us-dollar-outlook-usd-cad-volatility-to-rise-jobs-data-looms.html #NFP $DXY $USDCAD https://t.co/OIYZ2YXxLK
  • Heads Up:🇺🇸 Fed Kaplan Speech due at 22:05 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-05-06
  • The Federal Reserve discussed the vulnerability of asset prices should appetite change. Get your market update here: https://t.co/0nAEKEX1eh https://t.co/BD24UcDeyT
  • EUR/USD stronger amid broad USD weakness on Thursday $EURUSD https://t.co/h042KoSyuA
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.98% 🇨🇭CHF: 0.60% 🇦🇺AUD: 0.49% 🇳🇿NZD: 0.26% 🇯🇵JPY: 0.11% 🇬🇧GBP: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4u2cNfSmLn
  • RT @BrendanFaganFx: Federal Reserve Hints at Potential Declines in Asset Prices, Calls for Hedge Fund Transparency #Fed #FederalReserve #F…
  • Both EUR/JPY and EUR/USD are hovering near multi-year downtrend downtrends, while EUR/GBP may still have more room to the topside. Get your $EUR market update from @CVecchioFX here:https://t.co/2SYCKwz8hz https://t.co/tj6UQUDzRL
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 3.18% Gold: 1.61% Oil - US Crude: 0.31% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/mo9LS3teJl
GBP May Fall on CPI as Murky Data Inflames BoE Easing Bets

GBP May Fall on CPI as Murky Data Inflames BoE Easing Bets

Dimitri Zabelin, Analyst

British Pound, Bank of England, UK CPI – Talking Points

  • The British Pound could suffer from critical CPI statistics
  • Soft economic data has strengthened case for BoE easing
  • What has recently changed in GBP and why is it crucial?

The British Pound may fall if CPI statistics underwhelm and inflame what are already kindling ‘near-term stimulus’ expectations from the Bank of England (BoE). Economic data out of the UK has been tending to underperform relative to economists’ expectations as Brexit uncertainty chips away at business confidence. While the fundamental risks are temporarily abating, Sterling continues to find itself under pressure.

GBP May Fall on CPI

Year-on-year CPI is expected to remain unchanged at 1.5 percent, with its core counterpart – excluding volatile inputs like food and energy – is also anticipated to remain frozen at its prior print of 1.7 percent. Since peaking in November 2017, price growth has been on a downtrend and continues to hover below the central banks’ 2 percent target.

Chart showing CPI Data

Part of the weakness in CPI comes from the disinflationary impact of the US-China trade war that has compounded the UK’s contraction in industrial production; and officials have noticed. Last week, policymakers said the spell of economic weakness may require a “prompt response” in the form of ‘near-term stimulus’. Sterling subsequently fell.

What this indicates is the British Pound is once again sensitive to economic data to the extent that it has the capacity to bring the BoE easing timeline closer if prevailing conditions warrant it. This is a new trend relative to most of 2019 where it remains relatively impervious to sour economic data amid the BoE’s stance to only adjust interest rates until after Brexit. The recent comments from officials suggests their position has changed.

GBP/USD Technical Analysis

GBP/USD continues to remain range-bound following its spike on the UK election outcome and the spectacular decline that followed. The pair is now approaching support at 1.2905 where buying pressure may overcome the downside pressure of the sellers, though sour CPI data may support the latter and overwhelm the former. A break below 1.2905 opens the door to testing a multi-tiered floor between 1.2769 and 1.2816. GBP/USD – Daily Chart

Chart showing GBP/USD

GBP/USD chart created using TradingView

BRITISH POUND TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES