The UK inflation report today was pretty impressive, but the market was expecting such numbers since inflation has been running hot for quite a few months in the UK. So, GBP didn´t really notice it. The Climb in GBP/USD today has been more of a retrace of the 350 pip move down on Friday.
A while ago, the US producer inflation report was released and it was pretty good too, compared to the last few months when we saw some soft numbers from the US.
PPI (producer price index) remained unchanged last month, while the core PPI number beat expectations.
But the surprise came from the yearly numbers; yearly US PPI came out at 2.4% against 2.3% expected and core PPI which excludes food and energy jumped to 2.1% from 1.9%.
This is a decent report and it is being reflected on the USD. The Buck has gained about 20 pips so far, but the market is still cautious because the 2 day FED meeting starts today and concludes tomorrow.
Everyone is expecting a 25 bps rate hike from the FED, but we still have the US CPI (consumer price index) and retail sales coming up tomorrow, which might send the Euro running in any direction.
Although, you can see that the market is more confident on the USD now after the positive PPI report. So, we´re still waiting for GBP/USD to get to 1.2740 in order to open a sell forex signal.
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