GBP/USD Approaches Three-Month High Amid US Dollar Weakness

The US Dollar has fallen sharply today, following the publication of the latest US producer price index. October’s index reported producer price inflation cooled more than expected.

Producer prices often feed through to consumers in subsequent months, so an easing in October’s PPI index is seen as another signal US inflation is on a downward trend.

Today’s data will stoke expectations that the Federal Reserve will slow the pace of its future interest rate hikes. Speculation over which has triggered a sharp downturn in USD exchange rates in recent weeks.

The plunge in the US Dollar propelled the GBP/USD exchange rate to a near three-month high. The pairing even briefly passing a key barrier of resistance after climbing five cents since the start of November.

However, the Pound may struggle to consolidate these gains. The second half of this week will see the publication of the UK’s consumer price index and Autumn Budget, which could inject fresh volatility into Sterling.

Matthew Andrews

Contact Matthew Andrews

Do Not Sell My Personal Information