TheÂ British pound was onÂ aÂ downtrend against theÂ US dollar from theÂ start ofÂ today’s session largely boosted byÂ aÂ risk-off sentiment inÂ theÂ markets. TheÂ downtrend was further accelerated byÂ theÂ release ofÂ theÂ UK Consumer Price Index data forÂ April, which missed expectations, dragging theÂ pound much lower.
TheÂ GBP/USD currency pair today lost over 135 points toÂ decline from aÂ high ofÂ 1.3442 toÂ aÂ low ofÂ 1.3305.
TheÂ currency pair’s decline was initially caused byÂ theÂ risk off sentiment inÂ theÂ markets before theÂ Office forÂ National Statistics released theÂ UK CPI data forÂ April. TheÂ headline CPI print came inÂ atÂ 0.4% inÂ April, which translated into anÂ annualized 2.4%; both prints missed expectations byÂ 0.1%. TheÂ core CPI print was recorded atÂ anÂ annualized 2.1% versus theÂ expected 2.2%, which contributed to theÂ pair’s significant drop. TheÂ mixed producer price index output andÂ input data had aÂ muted impact onÂ theÂ currency pair. TheÂ retail price index met expectations byÂ coming inÂ atÂ aÂ monthly 0.5% andÂ anÂ annualized 3.4%.
TheÂ currency pair recovered slightly inÂ theÂ early American session despite theÂ release ofÂ theÂ positive Markit US Manufacturing PMI andÂ theÂ upbeat Markit US Services PMI. TheÂ mixed new home sales data forÂ April released byÂ theÂ Census Bureau could have contributed toÂ theÂ pair’s tepid recovery attempt.
TheÂ currency pair’s short-term performance is likely toÂ be affected byÂ theÂ release ofÂ theÂ FOMC minutes scheduled forÂ later today.
TheÂ GBP/USD currency pair was trading atÂ 1.3346 asÂ atÂ 16:12 GMT having declined from aÂ high ofÂ 1.3442. TheÂ GBP/JPY currency pair was trading atÂ 146.97 having dropped from aÂ high ofÂ 148.93.
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