Sterling Pound Trades Lower on UK Inflation Data, Later Recovers

The Sterling pound today traded lower against the US dollar following the release of the UK Consumer Price Index report for May in the early European session. The GBP/USD currency pair later rallied higher from the mid-European session into the North American session as the US dollar weakened against the pound.

The GBP/USD currency pair initially declined from an opening high of 1.3375 to a low of 1.3307 before rallying to a new high of 1.3383 in the American session.

The currency pair was on a downtrend from the Asian session following overnight jitters regarding the fate of Britain’s EU withdrawal bill. The pair headed lower after the Office for National Statistics released the latest CPI data. The headline CPI print came in at 0.4% in May translating into an annualized 2.4% print, which was slightly lower than the expected 2.5% figure. The core CPI print was recorded at an annualized 2.1%, which was in line with expectations. The producer price index report, also released today, beat consensus estimates by a large margin on both a monthly and annualized basis. The retail price index missed expectations by a slight margin.

The pair rallied higher in the American session despite the US producer price index released by the Bureau of Labor Statistics beating consensus estimates.

The currency pair’s short-term performance is likely to be affected by the FOMC rate decision scheduled for 18:00 GMT today, and the accompanying dot-plot followed by the Federal Reserve Chairman Jerome Powell‘s speech.

The GBP/USD currency pair was trading at 1.3381 as at 16:49 GMT having rallied from a low of 1.3307. The GBP/JPY currency pair was trading at 147.78 having risen from a low of 147.19.

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