GBP/USD Still Testing 1.3550 Ahead of US CPI
GBP/USD tested the 1.3550 area again for the fourth consecutive day on Wednesday, but has so far been unable to break higher. The market is likely to remain cautious ahead of the release of US consumer inflation (CPI) data on Thursday, which could be the next driver for the dollar and pound.
On the producer side, US PPI inflation cooled faster than expected in August. Core PPI fell to 2.8% YoY from 3.5% previously, boosting market expectations that the Fed will cut interest rates on September 17. The PPI reflects domestic price pressures because it excludes imported goods.
However, price pressures at the consumer level are likely to remain. Broad tariff increases and the end of the de minimis exemption for small shipments have resulted in US consumers bearing higher import costs. Consensus projects a headline CPI of 2.9% YoY and a core CPI of 3.1% YoY in August—still above the Fed's 2% target.
Going forward, GBP/USD's movement is likely to be determined by CPI data surprises. Hotter-than-expected data risks strengthening the USD and holding the pair below 1.3550. Conversely, cooler data could open the door to a break above 1.3550 and further gradual gains. (ayu)
Source: Newsmaker.id
