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Sterling stays above 200-day as traders await UK CPI

Societe Generale expects June UK headline inflation to ease to 2.7% year over year from 2.8%, and services inflation to fall to 3.6% from 3.7%.

Reported · Written up by our desk · Major Pairs

Societe Generale strategists said dip buying has helped keep GBP/USD above its 200-day moving average near 1.3403, even as UK Gilts remain under pressure.

The pair is trading in a 1.3400 to 1.3500 range as investors weigh the appointment of new UK Chancellor John Healey and look ahead to upcoming UK CPI data.

Societe Generale expects June headline inflation to dip to 2.7% year over year from 2.8%, services inflation to ease to 3.6% from 3.7%, and no change in core inflation at 2.6%.

The note also pointed to a backdrop of UK bond stress, with the premium of Gilts over Bunds around 140 basis points, and discussed how investors may reassess if the new chancellor can steer public finances ahead of the autumn budget.

Latest closeGBP/USD 1.348 ▼0.5%

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