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Sterling slips under 1.3400 after soft US inflation print
Cable gave back a move toward 1.3450 after June US CPI cooled, with the pair pinned below the 200-day EMA near 1.3400.
FXStreet said the pound dollar pair, also known as Cable, was trading just below the 1.3400 level late Tuesday, capped by a declining 200-day exponential moving average that sits only a few pips shy of the figure. The move lower followed a rebound attempt that failed, with the earlier spike toward 1.3450 later fully reversed. The outlet linked the initial rally to what it called the softest US inflation report in six years, released at 12:30 GMT. It noted June’s CPI fell 0.4% month over month, the biggest monthly drop since April 2020, while the annual rate eased to 3.5% from 4.2%. Core inflation was flat versus the 0.2% consensus and eased to 2.6% year over year. FXStreet also pointed to energy as the driver, saying gasoline slid 9.7% in June after a ceasefire signed the prior month knocked roughly a quarter off crude oil. However, it said the effect was already “a period piece,” with Washington and Tehran trading strikes again, the Strait of Hormuz effectively shut behind a reimposed blockade, and crude oil later clawing back about 10% in July. On rates, FXStreet said Fed Chair testimony in both slots reiterated that one good report is not enough to confirm a shift to the 2% target, while rate futures increased odds for no change at the current meeting toward about 86%. The same pricing still implied roughly seven-in-ten odds of at least one hike by year end and no cut, supporting the dollar and limiting sterling’s upside, while the Bank of England maintained Bank Rate at 3.75% and has held cuts “off the table” as an energy price cap increase works through bills.
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