Home Daily Commentaries GBP/USD hits one year high as US inflation slows

GBP/USD hits one year high as US inflation slows

Jake Trask
Written by
Jake Trask

Jake Trask

OFXpert

Based in London, Jake boasts a rich and extensive career in the foreign exchange industry, spanning 15 years.

| Friday 12 July, 2024

Daily Currency Update

GBP/USD touched its highest level since July 2023 yesterday as the pace of US inflation was shown to have slowed more than expected. June’s Consumer Price Index report came in under forecast showing prices rising at an annualised rate of 3% down from 3.3% the month before. Markets had expected 3.1% to be shown so the miss saw the dollar drop, equity markets rally and the chances of a September interest rate cut from the US Federal Reserve rise to around 85%. GBP/USD peaked at 1.2949 before falling back throughout the afternoon. The pound had been assisted on Wednesday by comments from Bank of England Chief Economist, Huw Pill which called into question whether we will see a BoE rate cut in August as well as some better than expected growth data for the UK in May released yesterday morning. GBP/USD is currently around 1.2910 and GBP/EUR is at 1.1880.

Key Movers

Looking ahead we have more inflation indicators from the US today with the monthly Producer Price Index data scheduled for release at lunchtime. The PPI data, which measures the change in costs wholesalers pay for materials in the production of goods filters through to CPI eventually and could be a market mover when it comes out. As usual any deviation from forecast will move the dollar and should it undershoot then 1.30 could be in play for GBP/USD for the first time since July 19th 2023. It’s another quiet day from the Eurozone so events in the US and commentary about President Biden’s fitness to run for another term will dominate the news. Many are calling on the President to step aside after more gaffes on the final day of the annual NATO conference where he introduced Ukraine’s President Volodymyr Zelensky as “President Putin” and also referred to Vice President Kamala Harris as “Vice-President Trump.” EUR/USD touched 1.09 yesterday after the US inflation miss and is now at 1.0875.

Expected Ranges

  • GBP/USD: 1.2860 - 1.3000 ▲
  • GBP/EUR: 1.1820 - 1.1915 ▲
  • GBP/AUD: 1.9040 - 1.9180 ▲
  • EUR/USD: 1.0800 - 1.0960 ▲

Written by

Jake Trask

OFXpert

As a Senior Corporate Client Manager, Jake and his team manage a diverse portfolio of 250 businesses to meet their varied foreign exchange needs. He enjoys untangling the complexities of foreign exchange dynamics, constantly striving to provide clients with the most informed insights and strategies to navigate these fluctuations successfully.

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