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British Pound Stays Weak Despite Core CPI Match, PPI Beat
Confirmed
In Short: The British Pound remains under pressure, despite meeting expectations in the UK's Consumer Prices Index (CPI) report, as markets await further monetary policy actions from the Federal Reserve.
The British Pound (GBP) has faced continued downward pressure, despite the UK Consumer Prices Index (CPI) meeting market expectations, according to FXStreet. The GBP/USD pair briefly rose but then retreated to 1.3480 from earlier highs near 1.3500 after the release of the CPI data for August.
More broadly, the Pound has declined 0.3% this week, as investors brace for a potential Federal Reserve rate hike, while the Bank of England is expected to maintain its current interest rates.
The core CPI in the UK has maintained a steady 2.6% growth rate, in line with market expectations, while the Producer Price Index (PPI) showed stronger-than-expected growth, with the input PPI rising to 6.1% year-over-year from 4.9% in July, and the Output PPI accelerating to 3.7% from 3.1%.
FXStreet notes that despite these economic indicators, the Pound's overall performance remains weak, as the market continues to focus on the Federal Reserve's monetary policy decisions and the Bank of England's stance on interest rates.
What's confirmed
- The British Pound (GBP) has faced continued downward pressure, despite the UK Consumer Prices Index (CPI) meeting market expectations, according to FXStreet. The GBP/USD pair briefly rose but then retreated to 1.3480 from earlier highs near 1.3500 after the release of the CPI data for August.
- More broadly, the Pound has declined 0.3% this week, as investors brace for a potential Federal Reserve rate hike, while the Bank of England is expected to maintain its current interest rates.
- The core CPI in the UK has maintained a steady 2.6% growth rate, in line with market expectations, while the Producer Price Index (PPI) showed stronger-than-expected growth, with the input PPI rising to 6.1% year-over-year from 4.9% in July, and the Output PPI accelerating to 3.7% from 3.1%.
- FXStreet notes that despite these economic indicators, the Pound's overall performance remains weak, as the market continues to focus on the Federal Reserve's monetary policy decisions and the Bank of England's stance on interest rates.
What's still developing
- A round up of the latest Pound Euro forecast news items from the Currency News desk.
- Bearing in mind the Fed Chairman Kevin Warsh's distaste for forward guidance, the market will be looking at the central bank's interest rate projections, the so-called "dot plot," to confirm expectations of further monetary tightening in the near-term.