12 June 2024, GBP/USD
Events to pay attention to today:
09:00 GMT+3. GBP - Gross Domestic Product
15:30 GMT+3. USD - Consumer Price Index
21:00 GMT+3. USD - FOMC Rate Decision
GBPUSD:
The GBP/USD pair is trading with slight losses around 1.2740 in the early Asian session on Wednesday. The continued rise in the US dollar (USD) amid cautious sentiment is exerting pressure on the major pair. Investors will be monitoring the US Consumer Price Index (CPI) data, which will be released hours before the FOMC meeting.
The stronger US jobs report released last week has led to a shift in expectations that the US Federal Reserve (Fed) will start cutting interest rates in September. However, a softer-than-expected inflation report could influence Fed Chairman Jerome Powell to maintain his stance of three interest rate cuts before the end of the year. This could consequently exert pressure on the US dollar. The US Consumer Price Index is anticipated to have increased by 3.4% year-on-year in May, while the core CPI for the same period is expected to have risen by 3.5% year-on-year.
The Federal Reserve is anticipated to maintain its current interest rate structure at its June meeting on Wednesday. Traders will be monitoring the latest interest rate forecasts to identify the number of times the Fed is expected to cut rates in 2024. The CME FedWatch Tool indicates that market expectations are for one to two rate cuts in 2024.
Conversely, the UK labour market experienced a fourth consecutive contraction. The change in the number of people in employment in the three months to April was 140,000 lower than the previous figure of 177,000. In other news, the ILO unemployment rate increased to 4.4% in the three months to April, up from 4.3% in the previous period. This was above market expectations of 4.3%. The number of people claiming unemployment benefits increased by 50,400 in May, up from 8,400 in April. Following the release of disappointing reports, the value of the pound declined. The unemployment rate and number of jobless claims data for May revealed a concerning picture of the UK labour market.
Trading recommendation: Trading mainly by Sell orders from the current price level.
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