- Hotter-than-expected US headline and core CPI help ease the USD bearish pressure.
- Expectations of a 50 bps rate cut by the Fed might cap any attempted USD recovery.
The GBP/USD pair maintained its strong bid tone through the early North-American session, albeit retreated few pips from weekly tops post-US CPI.
The bearish pressure surrounding the US Dollar – triggered by the Fed Chair Jerome Powell’s dovish remarks, eased a bit following the release of slightly stronger-than-expected US consumer inflation figures for June.
In fact, the consumer inflation – as measured by headline CPI, ticked higher by 0.1% during the reported period as compared to consensus estimates pointing to a flat reading expected, while the yearly rate held steady at 1.6%.
Meanwhile, the core CPI – excluding food and energy costs, also bettered market expectations – rising 0.3% and 2.1% on monthly and yearly basis respectively and provided a much-needed respite to the USD bulls.
However, the fact that market participants have already started pricing in a 50 bps rate cut by the Fed later this July kept a lid on any strong USD recovery and should help limit any meaningful pullback, at least for now.
Technical levels to watch
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