GBP/USD drops to 1.3700 after latest BoE headline

• GBP/USD posts modest daily losses in early American session.
• BoE announced Chief Economist Haldane will step down in June.
• US Dollar Index stays in the red after CPI data.

The GBP/USD pair came under modest bearish pressure in the early American session and dropped to a daily low of 1.3695. As of writing, the pair was down 0.15% on a daily basis at 1.3720.

GBP/USD remains on the back foot despite broad USD weakness

The data published by the US Bureau of Labor Statistics revealed that the Consumer Price Index (CPI) in March rose to 2.6% on a yearly basis from 1.7% in February. Furthermore, the annual Core CPI, which excludes the volatile energy and food prices, edged higher to 1.6% and surpassed the market expectation of 1.5%. With the initial reaction, the US Dollar Index fell toward 92.00 and allowed GBP/USD to advance to 1.3750 area.

However, after the Bank of England (BoE) announced that  Chief Economist Andy Haldane will quit his position and step down from the Monetary Policy Committee (MPC) after June’s meeting, the British pound lost its strength.

Reflecting the negative impact of this announcement on the GBP, the EUR/GBP pair jumped to its highest level since late February at 0.8713 and was last seen gaining 0.34% at 0.8695.

There won’t be any other macroeconomic data releases from the US in the remainder of the day and the pair could have a difficult time regaining its traction given the lack of interest in the GBP.  

Technical levels to watch for