Today's Pound Sterling News - GBP experienced a sharp decline after the UK's Office for National Statistics (ONS) reported a significant drop in inflation in November. The GBP/USD currency pair saw heavy selling as the UK's Consumer Price Index (CPI) fell more than expected, raising speculation about a potential early interest rate cut by the Bank of England (BoE).
 
Despite inflation in the UK declining more than expected in November, BoE policymakers are expected to maintain a policy of keeping interest rates high for a prolonged period. Price pressures in the UK remain the highest compared to other developed countries, likely prompting BoE policymakers to announce rate cuts at a slower pace compared to other major central banks.
 
Daily Market Movement Summary: The Pound Sterling plunged sharply due to weaker inflation data.
 
  1. The Pound Sterling faced heavy selling pressure after the ONS released inflation data below expectations for November.
  2. Monthly inflation shrank by 0.2% in November, down from the expected rise of 0.1%. Annual inflation growth slowed to 3.9%, below the forecast of 4.4%. In October, the overall inflation grew by 4.6%.
  3. Annual core inflation, excluding food and energy price fluctuations, weakened to 5.1%, below the consensus of 5.6% and the previous figure of 5.7%.
  4. The monthly Producer Price Index (PPI) for input and output contracted by 0.3% and 0.1%, respectively, below market expectations.
  5. This indicates a decline in factory-level goods prices, likely due to reduced domestic and international demand.
  6. Despite weak inflation reports, the Bank of England is expected to maintain high interest rates for a prolonged period.
  7. BoE Deputy Governor Sarah Breeden emphasized the need to maintain tight policies to control price pressures.
  8. BoE Deputy Governor Ben Broadbent also stressed the importance of maintaining high interest rates for an extended period, highlighting the need for further evidence of a decline in inflation.
  9. Later this week, investors will focus on UK Retail Sales data for November, with consumer spending expected to grow by 0.4% month-over-month.
  10. Meanwhile, the US Dollar Index (DXY) remains sideways around 102.00 after a slight drop due to rising expectations of rate cuts by the Federal Reserve (Fed).
  11. The DXY Index struggles to find strong footing, despite Atlanta Fed President Raphael Bostic's criticism of the urgent need for rate cuts.
  12. This week, investors will monitor US Core Personal Consumption Expenditures (PCE) price index data, which will be published on Friday.
  13. Based on preliminary consensus, monthly Core PCE is expected to grow steadily at 0.2%, while annual Core PCE is expected to weaken to 3.3% from the previous figure of 3.5%.

Disclaimer!
 
The analysis of "Today's Pound Sterling News" is based on fundamental and technical perspectives from reliable sources and does not constitute advice or solicitation. Remember, this content aims to enrich readers' information. Always conduct independent research on other forex information before using it as a reference in your trading.
 
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