The British pound today declined against the US dollar after the release of weak UK inflation data as tracked by the Consumer Price Index. The pound retraced most of yesterday’s gains as demand for the US dollar increased across the board.
The GBP/USD currency pair declined by over 60 points from a session high of 1.3806 to hit a low of 1.3741.
The currency pair headed lower during the Asian session, but extended its downtrend after the release of the CPI data for December by the Office for National Statistics. The December CPI came in at 0.4% on a monthly basis and at 3.0% on an annualized basis with both prints meeting analysts’ expectations. However, the core CPI print, which excludes food and energy prices came in at 2.5%, which was lower than the expected 2.6%. The retail price index for December was higher than expected, but could not lift the pair. The negative producer price index also reported at the same time might have contributed to the pair’s overall decline.
The currency pair had rallied higher by about 320 points from a low of 1.3458 hit on Thursday January 11, to yesterday’s high of 1.3820. The pair was due for a correction as some technical indicators such as the RSI had reached overbought conditions.
The currency pair’s future performance is likely to be affected by the release of the US Empire manufacturing print scheduled for later today and the ongoing Brexit negotiations.
The GBP/USD currency pair was trading at 1.3756 as at 12:32 GMT having declined from a session high of 1.3806. The GBP/JPY currency pair was trading at 152.22 having dropped from a daily high of 153.09.
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