The Pound dropped to 1.3396 as hotter-than-expected US inflation data and hawkish comments from Fed Governor Waller increased the likelihood of a 50-basis-point interest rate hike.
October core CPI rose 0.3% MoM, above the 0.2% estimate, and headline CPI stayed above forecasts, prompting Governor Waller to say inflation is too high and a 50 bps hike would be warranted if readings stay hot. The Dollar rose 0.39-0.71% against the major currencies in the table, and higher Fed rate expectations support further gains.
Hotter-than-expected October US inflation (core CPI 0.3% MoM vs 0.2% forecast) plus hawkish remarks from Fed Governor Waller lifted expectations for a larger Fed rate hike, driving the Pound down over 0.40% to 1.3396. Technicals show the pair capped below the 50-, 100- and 200-day SMAs around 1.3453-1.3457 in a corrective downtrend, with support at 1.3375 and a downside floor at 1.3226.
The Pound fell over 0.40% versus the Dollar, 0.50% per the heat map, as hawkish Fed repricing dominated. On the UK side, BRC Like-For-Like Retail Sales in October improved to 1.1% but missed the 1.2% forecast, offering little domestic support ahead of Thursday's Q3 GDP release.
The British Pound fell over 0.40% to 1.3396 against the US Dollar after October core CPI rose 0.3% MoM, exceeding the 0.2% forecast. Fed Governor Christopher Waller signaled that persistent inflation could warrant a 50-basis-point rate hike, strengthening the Dollar and keeping the Pound capped beneath key moving averages.
Hotter-than-expected October inflation, with core CPI up 0.3% month over month against a 0.2% estimate, and hawkish comments from Fed Governor Waller raised expectations for a bigger Fed rate hike, lifting the Dollar against its major peers.
US inflation came in above forecasts and a Fed governor hinted a larger 50 basis point rate hike is on the table, which strengthens the US Dollar and pushed GBP/USD down over 0.40% to around 1.3396.
Resistance sits at the 200-day SMA near 1.3453, with the 50- and 100-day SMAs at 1.3455-1.3457 above it. Immediate support is at 1.3375, and a drop below 1.3226 would reinforce the bearish outlook.
Not mainly. The decline is driven by hot US inflation and hawkish Fed comments strengthening the Dollar; UK retail sales data was slightly soft but the article points to the Fed story as the key driver.