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GBP/USD slides on cooler UK inflation print

The June UK CPI rate came in at 2.6% year over year versus a 2.7% consensus, with services inflation easing and a rate-hike case for the BoE at the 30 July meeting stripped back.

Reported · Written up by our desk · Major Pairs

The British pound eased against the US dollar after the latest UK inflation report showed a softer slowdown in prices, helping sellers preserve the momentum from the prior session. FXStreet said GBP/USD dipped toward the 1.3350 area in early New York trade, its weakest level in over a week, and was positioned between support just below 1.3350 and a moving-average band under 1.3400.

The Office for National Statistics put headline CPI at 2.6% year over year for June, below the 2.7% consensus and down from 2.8% in May. Services inflation eased to 3.6% from 3.7%, the monthly gain ran at 0.1%, and FXStreet noted that transport and food did much of the downward work.

FXStreet also pointed out that the data arrived eight days before the Bank of England decision on 30 July, reducing the near-term case for a hike. Markets had been pricing roughly one additional move to 4.0% over the coming months, and FXStreet said the June print pushed that path further out, while core inflation held at 2.6% versus a 2.5% consensus.

On the rate outlook and broader risk backdrop, FXStreet tied the dollar’s support to continued geopolitical pressures in the Middle East, including ongoing US strikes on Iran and elevated crude prices, factors that can keep demand firmer for the greenback while risk currencies face slower recoveries.

Latest closeWTI crude $87.52 ▲3.1%|GBP/USD 1.338 ▼0.4%

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