GBP/USD staggered to new lows but then recovered to flat territory. | 14 Enero 2025

GBPUSD:

GBP/USD faltered as markets changed their expectations for interest rates before the end of the year, sending the pair to fresh 15-month lows and breaking through 1.2100, but then ended trading near the 1.2230 starting point.

It has been a quiet start to the week, but more inflation data from both the US and the UK will give traders plenty of material to ponder as they try to determine the first quarter rate differential forecast. The Federal Reserve (Fed) is expected to keep interest rates steady for the first half of the year, while the Bank of England (BoE) will have to choose between keeping interest rates stable in a still-high inflation environment and risking an inflationary spike to support the floundering UK economy with further rate cuts.

Tuesday's significant data of the week will start with the US Producer Price Index (PPI), which is expected to rise to 3.7% y/y in December from the previous reading of 3.4%. Wednesday will see the release of UK Consumer Price Index (CPI) inflation, which is also expected to accelerate in the near term, with a rise to 0.4% m/m versus the previous reading of 0.1%.

US CPI inflation, also out on Wednesday, is forecast to rise to 2.8% from 2.7%, US retail sales data is expected on Thursday and UK retail sales round out the list of important data this week.

Trading recommendation: Watching the level of 1.2150, trading mainly with Sell orders

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