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14 June 2024 | FXGT.com

GBP/USD Drops Ahead of Crucial UK CPI Report and BoE Policy Decision

  • GBP/USD Trades with Negative Bias: The GBP/USD pair remains under selling pressure for the second straight day on Friday, having dropped to the 1.2680 level, which has been providing support over the past three weeks.
  • UK Inflation Data: Headline inflation has fallen close to the BoE’s 2% target. However, services sector inflation was much higher than expected in April. Additionally, wage growth in May was 6%, roughly double the level consistent with the target.
  • Upcoming UK May CPI: Set for release on Wednesday, June 19th, this report comes one day before the Bank of England’s policy decision. The month-on-month inflation rate slowed to 0.3% in April from 0.6% in February and March. Core CPI will be closely watched after slowing to 3.9% in April.
  • Bank of England Interest Rate Decision: While a rate cut next week is unlikely, market expectations for a cut in August might increase. Investors will closely listen for any signs of a different stance from the central bank, influenced by Wednesday’s CPI report. The BoE’s handling of recent inflation data, committee voting patterns, and liquidity concerns will be key factors in their forthcoming decisions.
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