Home›Forex›Major Pairs›Pound jumps after softer US PPI cools dollar

Pound jumps after softer US PPI cools dollar

GBP/USD rose about 0.6% to around 1.3460 after US producer prices eased, with core PPI also coming in below forecasts.

Reported · Written up by our desk · Major Pairs

The British pound strengthened against the US dollar after US producer price inflation data showed prices edging lower, according to FXStreet. GBP/USD was up roughly 0.6% to about 1.3460, bouncing from a daily low near 1.3370.

FXStreet said the US Bureau of Labour Statistics reported June PPI fell from 6.0% to 5.5% year over year, below the 6.2% estimate. Excluding volatile items, core PPI slowed from 4.6% to 4.7% year over year, also below expectations of 5.2%.

The outlet tied the move in part to energy price dynamics and noted that US-Iran developments weighed on energy, with WTI dropping about 30% from roughly $97 in early June to about $68 by the end of last month. However, FXStreet added that Middle East conflict risks have helped push WTI up nearly 15% to around $80 since that $68 level, which could later feed back into inflation.

FXStreet also pointed to easing UK political tensions and said speculation about Britain potentially closing ties with the European Union supported sterling. Money markets were pricing 36 basis points of Bank of England tightening by year end, while the odds of holding rates at the July 30 meeting were 87% based on Prime Terminal data.

Latest closeWTI crude $79.90 ▲2.2%|GBP/USD 1.339 ▲0.0%

More like this

Sources