13 February 2024, GBP/USD
Event to watch out for today:
09:00 EET. GBP - Unemployment Rate
15:30 EET. USD - CPI m/m
GBPUSD:
In the early Asian session on Tuesday, the GBP/USD pair is consolidating in a narrow trading range above 1.2600. Later in the day, the UK labour market data and the US inflation report could trigger market volatility. As of now, GBP/USD is trading at 1.2626, down 0.02% for the day.
Last month, Federal Reserve (Fed) Chairman Jerome Powell stated that the central bank was unlikely to begin cutting rates in March. Investors now anticipate that the Fed will begin easing rates in May or June. Several officials have stated that more inflation data is required before cutting rates. The U.S. Consumer Price Index (CPI) for January could provide insight into the potential timing of a rate cut.
On Monday, Bank of England (BoE) Governor Andrew Bailey expressed optimism about the UK economy and downplayed the significance of upcoming data that some analysts had predicted would show the country had entered a technical recession late last year. Last week, Bank of England policymaker Sarah Breeden stated that the central bank had moved from tightening rates to considering when they might be cut, due to the recent fall in UK inflation, which has altered the Bank of England's forecast. However, Bank of England governors Jonathan Haskell and Catherine Mann emphasised the risks of rising prices and supported keeping interest rates high for longer.
On Tuesday, UK labour market data will be released, including employment change, ILO unemployment rate, and change in benefit claimants. In the US, CPI inflation data for January will be released. Later in the week, attention will shift to the Producer Price Index (PPI) and UK Gross Domestic Product (GDP). These events may provide a clear direction for the major pair.
Trading recommendation: Watch the level of 1.2600, trade from it on the rebound.
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