The GBP/USD currency pair rallied higher today during the North American session after the release of weak US Consumer Price Index data for the month of May. The currency pair started the European session on a downward trend after the release of weak UK average weekly earnings data, but quickly rallied higher after the release of the disappointing US data.
The currency pair gained over 80 points at the height of its rally to post new weekly highs above the crucial 1.2800 level.
The release of weak UK data as exemplified by the average weekly earnings release by the Office for National Statistics, which came in at 2.1% versus the expected 2.4% and the previous 2.3% increased the selling pressure on the pound. The UK employment change for April also disappointed as it was recorded at 109,000 versus the expected 125,000. Other jobs reports such as the ILO unemployment rate for April and the jobless claims change for May met and exceeded expectations respectively.
The GBP/USD pair rallied higher after the release of weak CPI data released by the Bureau of Labor Statistics, which declined by 0.1% in May, lower than the expected 0.0%. The annualized figure declined by the same margin to 1.9% versus the expected 2.0%. The advance US retail sales figures for May released by the Census Bureau also declined by 0.3%.
The currency pair’s short-term performance is likely to be affected by the FOMC rate decision scheduled for later today at 18:00 GMT.
The GBP/USD currency pair was trading at 1.2808 as at 16:33 GMT having rallied from a low of 1.2720. The GBP/JPY was trading at 139.69 having dropped from a daily high of 140.90.
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