Skip to Content
News & Analysis at your fingertips.
Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
British Pound (GBP) Latest: GBP/USD Correction Due, UK Inflation Beats Expectations

British Pound (GBP) Latest: GBP/USD Correction Due, UK Inflation Beats Expectations

What's on this page

GBP price, news and analysis:

  • The recent strong climb in GBP/USD looks to be running out of steam and a correction lower is now on the cards.
  • That in part reflects a strengthening USD as the markets focus on rising US Treasury yields.
  • Meanwhile, the latest UK inflation data came in higher than the consensus forecast but that has had little impact on GBP.
Advertisement

GBP/USD correction due

The recent strength in GBP/USD looks to be running out of steam and a correction lower is looking more and more likely after the pair failed to reach the 1.40 level, topping out around 1.3950 Tuesday.

GBP/USD Price Chart, Hourly Timeframe (February 4-17, 2021)

Latest GBP/USD price chart.

Source: IG (You can click on it for a larger image)

GBP Forecast
GBP Forecast
Recommended by Martin Essex, MSTA
Download our Q1 GBP forecast
Get My Guide

For now, the principal driver seems to be rising yields on US Treasury bonds and notes as the rollout of coronavirus vaccines leads to hopes that the US economy is on the way to recovery, potentially leading to rising US inflation.

US 10-Year Treasury yield.

Source: Investing.com (You can click on it for a larger image)

In the meantime, UK inflation data for January were released early Wednesday and showed inflation above the consensus forecasts of economists polled by the news agencies.

UK inflation data.

Source: DailyFX calendar (you can click on it for a larger image

The figures have had little impact, however, on GBP/USD – which continues to be driven principally by the USD side of the pair.

GBP/USD Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -15% 2% -5%
Weekly -8% -9% -9%
What does it mean for price action?
Get My Guide

You can check out how inflation data impact currency rates by clicking here

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

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

DISCLOSURES