GBP/USD surrenders its modest intraday gains, flat-lined below 1.1900 ahead of US CPI – by HareshMenghani GBPUSD GDP Fed Inflation Currencies
ndered its early gains and retreated to the lower end of the daily range, around the 1.1885-1.1880 zone during the first half of the European session.
The British pound drew support from upbeat UK macro data, which validated market bets for a 50 bps rate hike by thein August. In fact, the UK Office for National Statistics that the economy recorded a growth of 0.5% in May as against a flat reading expected. This was accompanied by stronger data from the UK industrial sector, though the initial market reaction turned out to be short-lived.
Investors remain worried that the UK government's controversial Northern Ireland Protocol Bill could trigger a trade war with the European Union. This, in turn, was seen as a key factor that acted as a headwind for. Apart from this, the underlying strong bullish sentiment surrounding the US dollar, bolstered by hawkish expectations, kept a lid on any meaningful gains for the GBP/USD pair.
In fact, the FOMC minutes released last week indicated that another 50 or 75 bps rate hike is likely at the upcoming meeting in July. Policymakers also emphasized the need to fight inflation even if it results in an economic slowdown. Hence, the focus remains on the US consumer inflation figures for June, which will driveA stronger-than-expected US CPI print would be enough to boost the greenback.
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