Skip to content

GBPUSD Price: Pound Rallies Higher on Weak US Inflation Data

Simon Mugo trader
Updated 13 Dec 2022

The GBPUSD currency pair was trading up over 155 pips as investors reacted positively to the release of weak US CPI data early in the American session. The cable had traded sideways until the US inflation data was released, triggering a higher spike.

new-recommended-broker-banner

YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The US CPI data released today showed that the CPI rose 0.1% month-on-month, missing analysts’ estimates set at 0.3%. The figure translated to an annualised print of 7.1%, lower than the consensus estimate of 7.3% and the previous 7.7% figure.

Top Broker Recommendation

YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

The core US CPI figure, closely monitored by the US Federal Reserve, came in at 0.2%, missing analysts’ average estimate of 0.3%. 

Investors bid up the GBPUSD currency pair following the weak inflation data, which almost guarantees that the Fed will hike rates by 50 basis points at its Wednesday monetary policy meeting. 

The markets were watching the US CPI data closely, given that it could significantly impact the Fed’s rate hike decision tomorrow. The weak CPI data indicates that the Fed’s rate hikes have had the intended effect of cooling inflation in the US despite the busy holiday shopping period. 

Earlier today, the pound had barely reacted to the release of upbeat UK jobs data as the country added  27,000 new jobs in September, surpassing analysts’ estimates of 17,000 job losses. However, the claimant count rose by 30,500 claims compared to the expected 3,500 increase leading to a mixed jobs report. 

The UK’s unemployment rate remained stable at 3.7%, while the average earnings on a 3-month basis in October fell slightly to 6.1% from 6.2%. The currency pair had been trading sideways up to the American session as investors anticipated the release of the US inflation data. 

The pair remains susceptible to tomorrow’s FOMC interest rate decision, which is the last interest rate decision for the year. 

*This is not investment advice. 

The GBPUSD price chart.

The GBPUSD currency pair was trading up 159.3 pips (1.29%) at writing after the release of upbeat UK employment data.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading