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Sterling steadies as UK inflation rises, markets await FOMC minutes

UK CPI increased to 2.9% in July, while GBP/USD held around 1.3550 ahead of the Fed’s July policy minutes.

Reported · Written up by our desk · Major Pairs

Major currency pairs were trading without clear direction midweek as investors waited for fresh data and Fed signaling, with Eurostat set to release revisions to July European inflation and the Federal Reserve scheduled to publish the minutes of its July meeting later on Wednesday, according to FXStreet.

In the UK, annual inflation measured by the Consumer Price Index rose to 2.9% in July from 2.6% in June, matching analysts’ expectations, while core CPI was 2.6%, unchanged from June. The UK also saw the Producer Price Index for inputs fall 1.7% on a monthly basis versus expectations for no change.

In FX markets, GBP/USD edged higher in the European morning and traded around 1.3550 after closing marginally lower on Tuesday. FXStreet also noted the US Dollar remained under pressure earlier in the day, with the US Dollar Index slipping near 99.50 while US stock index futures were flat.

Focus also turned to the Fed minutes, after the July meeting vote was 9 to 3 for unchanged rates, which FXStreet said had been dovish for the short end of the US curve and the Dollar but had seen selling at the long end. ING further highlighted that an unresolved Middle East conflict has kept energy prices supported and partially contributed to higher long-end yields, adding context for how the back end of the US curve may react.

Latest closeGBP/USD 1.354 ▲0.3%|Dollar index 99.64 ▼0.3%

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