GBP/USD surges to 1.2500 ahead of the UK CPI data
- GBP/USD surges to the 1.2500 barrier on the softer USD.
- The US headline Consumer Price Index (CPI) for October came in worse than the market consensus.
- UK ILO Unemployment Rate remains unchanged at 4.2% in the quarter to September.
- Traders will focus on the UK inflation data and the US Producer Price Index (PPI), Retail Sales.
The GBP/USD pair edges higher during the early Asian trading hours on Wednesday. The weakening of the US Dollar (USD), backed by a fall in US Treasury bond yields, lends some support to GBP/USD. At press time, the major pair is trading around 1.2497, down 0.04% on the day.
The US headline Consumer Price Index (CPI) for October surges 3.2% YoY versus 3.7% prior, worse than the market consensus of 3.3%. The core CPI, which excludes volatile food and energy prices, rose by 0.2% MoM and 4.0% YoY. The market anticipates the Federal Reserve (Fed) will not raise the interest rate further in this cycle. According to the CME FedWatch Tool, fed fund futures have priced in 0% odds of a rate hike in the December meeting. This, in turn, exerts some selling pressure on the Greenback and lifts the GBP/USD pair.
On the other hand, Bank of England (BoE) Chief Economist Huw Pill said on Tuesday that there is significant progress on inflation. Huw further stated that they don't necessarily need to hike another rate but are prepared to if needed.
On Tuesday, the UK ILO Unemployment Rate remained steady at 4.2% in the quarter to September, matching the market estimation of 4.2%. Meanwhile, the number of people claiming jobless benefits rose by 17.8K in September from the previous reading of 20.4K.
Looking ahead, the UK Consumer Price Index (CPI) for October will be released. The monthly and annual UK inflation figures are expected to rise by 0.1% and 4.8%, respectively. The core CPI number is estimated to climb 5.8% YoY in October. On the US docket, the Producer Price Index (PPI) and Retail Sales will be due.
Reprinted from FXStreet_id,the copyright all reserved by the original author.
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