30.2 C
New York

Pound falls, US inflation jumps

Date:

FacebookTwitterEmail

GBP/USD has reversed directions on Thursday, giving up most of the gains from a day earlier. In the North American, session, GBP/USD is trading at 1.3132, down 0.41% on the day.

US inflation accelerates to 7.9%

In the US, headline CPI continued to accelerate, with a gain of 7.9% for February YoY. This matched the forecast and was up from 7.5% beforehand. With inflation running close to 8%, a rate hike is a virtual given at next week’s Federal Reserve meeting. What happens after that is less clear, as the Fed has to worry about stagflation, given the massive upswing in oil prices. The markets had priced in six rate hikes this year, but the turbulence due to the Ukraine crisis and the staggering rise in oil prices will translate into the Fed being more cautious about future rate hikes.

Earlier today, a meeting between the foreign ministers of Russia and Ukraine earlier today did not result in any breakthroughs, although the sides agreed to continue to meet. The fighting continues, and with the Russian invasion force appearing to have stalled, there are fears that Russian President Putin could double down in frustration and hit more civilian targets. This would exacerbate the massive humanitarian crisis due to the Russian invasion, which has already affected millions of Ukrainians.

UK GDP, Manufacturing Production next

The markets will be treated to a data dump from the UK on Friday. The highlights include the January reports for GDP and Manufacturing Production. GDP is expected to jump 9.3% YoY, following a 6.5% gain in December. Manufacturing Production is forecast to accelerate to 3.1%, compared to 1.3% beforehand. Strong readings would be further indication that the UK economy continues to improve, with the next BoE rate meeting just a week away.

.

GBP/USD Technical

  • GBP/USD has broken through support at 1.3146. Below, there is support at 1.3057
  • There is resistance at 1.3249 and 1.3380

Pound falls, US inflation jumps

Related articles

spot_img

Recent articles

spot_img