The GBPUSD currency pair was trading up over 89.2 pips (0.75%) at writing as the British pound rallied against the US dollar. The pound was boosted by weaker consumer expectations for the country’s inflation figures over the next 12 months.
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According to a study by YouGov and Citi, UK consumers expect the country’s inflation rate to fall to 5.7% by December 2023 compared to a previous survey that put the figure at 6.1%, which boosted the Sterling pound.
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Investor sentiment towards the pound improved on the better inflation expectations given the multiple headwinds facing the UK economy, including strikes by workers across multiple industries, including the crucial railway sector, and weak housing data.
The UK mortgage approvals data released earlier today indicated that mortgage approvals in the country fell to 46,075 in November from the previous figure of 58,077 approvals, missing analysts' estimates of 55,000 approvals.
The GBPUSD currency pair was also boosted by the weak US ISM Manufacturing PMI, which fell to 48.4, missing analysts' consensus estimates by 0.1%, marking a slight decline from the previous figure of 49.0.
The ISM data indicated that the US manufacturing sector contracted in December, boosting the pound. However, the poor ISM Manufacruticng prices data came in at 39.4, missing expectations set at 42.6 and the previous figure of 43 that sunk the US dollar.
The falling US manufacturing prices are a result of the inventory build-up by manufacturers in anticipation of persistent supply chain disruptions and surging demand. However, the demand for the inventory is not high enough, creating an oversupply of goods in the market.
The currency pair’s performance will also be influenced by the release of the FOMC minutes scheduled for 19:00 GMT today. The minutes will inform investors of the Fed’s position regarding future rate hikes and could significantly impact the pair’s performance.
*This is not investment advice.
The GBPUSD price chart.
The GBPUSD currency pair was trading up 89.2pips (0.75%) as the British pound rallied against the US dollar.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.