11 July 2024, GBP/USD
Events to watch out for today:
09:00 GMT+3. GBP - GDP Volume Change
15:30 GMT+3. USD - Consumer Price Index
18:30 GMT+3. USD - FOMC member Rafael Bostic will deliver a speech
20:00 GMT+3. USD - FOMC Member Alberto Musalem to deliver a speech
GBPUSD:
The GBP and USD pair rose on Wednesday, hitting a four-week high, after the broad market renewed expectations of future rate cuts after Federal Reserve (Fed) Chairman Jerome Powell wrapped up his two-day semi-annual monetary policy report. Thursday's U.K. data is limited to average industrial production figures, but looming U.S. consumer price index (CPI) inflation will draw plenty of investor attention during Thursday's U.S. market session.
Markets hungry for rate cuts decided that Fed Chairman Powell's speech to Congressional committees was close enough to dovish this week, with Powell giving a cautious nod to recent inflation progress. Risk appetite rebounded as investors returned to hopes of a September rate cut. On Thursday, investors will be expecting US CPI inflation to fall as average market forecasts expect annual core CPI inflation to remain at 3.4% in June.
Pound traders are leaning towards betting on a Bank of England (BoE) rate cut in August despite the cautious tones of several BoE policymakers on Wednesday, and UK industrial production data on Thursday will be a key indicator of rate cut hopes. UK industrial production is expected to rebound to 0.2% m/m after a previous decline of -0.9%.
More US inflation data is due on Friday: the US wholesale core PPI is expected to rise to 2.5% y/y from the previous reading of 2.3%, which could be a stumbling block for the broad market's hopes of a rate cut.
Trading recommendation: Trade mainly with buy orders at the price level of 1.2880. We consider sell orders at the price level of 1.2830.
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