Pound US dollar (GBP/USD) exchange rate muted ahead of high impact US data
The pound US dollar (GBP/USD) exchange rate is trapped in a narrow range this morning as investors await the publication of the US’s latest inflation data, scheduled for release this afternoon.
At the time of writing, GBP/USD is trading at around $1.3075, virtually unchanged from this morning’s opening levels.
US dollar (USD) rangebound ahead of inflation data
The US dollar (USD) is treading water against the majority of its peers this morning despite today’s cautious market mood, as US investors are reluctant to place any aggressive bets on the safe haven currency ahead of this afternoon’s consumer price index (CPI).
Following yesterday’s publication of the latest FOMC minutes, USD exchange rates rallied as the minutes from the Federal Reserve’s latest interest rate decision showed that its whopping 50 basis-point interest rate cut was unlikely to be repeated in November.
This saw 50 bps rate cut bets weaken, buoying the ‘greenback’ in the second half of yesterday’s European session.
However, this afternoon’s inflation data is forecast to report that both core and headline inflation cooled last month, which could revive 50 bps rate cut bets and dent the US dollar.
Equally, should September’s CPI reading report sticky US inflation instead, USD exchange rates will likely firm.
Pound (GBP) muted amid continued lack of data
The pound (GBP) is once again struggling to gain ground against the majority of its peers this morning as a continued lack of macroeconomic data releases this week have dampened Sterling sentiment.
However, the pound in managing to stay afloat despite the lack of data and despite a risk-off market mood.
As an increasingly risk-sensitive currency, GBP exchange rates usually benefit from risk-on trading conditions. However, despite this, Sterling is managing to hold steady.
GBP/USD exchange rate forecast: UK GDP in the spotlight
Looking ahead, the primary catalyst of movement for the pound US dollar exchange rate looking ahead to tomorrow will likely be the publication of the UK’s latest GPD reading.
The data is expected to report that the UK economy grew by 0.2% in August, up from a previous reading of 0%, and could support Sterling sentiment tomorrow should the data print as expected.
Across the Atlantic, the US dollar could trade in a wide range tomorrow as the US’s latest PPI data for September is forecast to report a minute 0.1% increase while the latest Michigan consumer sentiment index is forecast to rise.