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