The US dollar, which had gained ground last week, was under a bit of pressure earlier today. And following a mixed inflation report, the greenback spiked before returning to pre-CPI levels. The inflation report hasn’t changed market’s perception about the likely path of interest rates.
US CPI comes in mixed
June’s CPI rose 0.3% MoM and 2.7% YoY—hotter than the prior 2.4% and above the 2.6% consensus. However, core CPI was a touch weaker, rising 0.2% m/m instead of 0.3%, while the y/y rate was 2.9% as expected.
The mixed CPI report means concerns that inflation may persist longer haven’t changed. The Fed may still delay or reduce the scope of any rate cuts, even if a September move is still on the table.
Adding to the dollar’s appeal, President Trump floated steep tariffs—35% on some Canadian goods and up to 30% on imports from Mexico and the EU—if deals aren’t reached by August 1. These protectionist signals and Trump’s expansive fiscal stance could further stoke inflation, supporting the greenback if confidence in US monetary policy holds.
Pound under pressure
Sterling has had a rough start to the week, extending last week’s 1% drop in GBP/USD before rebounding slightly earlier today. The pound's slide follows a run of soft UK economic data, boosting expectations for a Bank of England rate cut—likely in August. On Friday, data confirmed a second consecutive monthly contraction in the UK economy, driven by a worsening manufacturing slump. This has added to speculation that weakening growth and a stronger pound could help ease imported inflation, especially ahead of Wednesday’s UK CPI release.
Technical picture and key data ahead for GBP/USD
GBP/USD has broken below important support zones (1.3630 and 1.3530–1.3550), now turned resistance. It is currently testing the 1.3434 level, aligned with a key trendline. A breakdown here could open the door to deeper losses toward 1.3370 and potentially the low 1.30s.
Two major data points will guide the pair this week:
• UK CPI (July 16): A soft print would likely reinforce rate cut bets.
• US Retail Sales (July 17): After a May decline, a rebound could highlight US resilience and strengthen the dollar further.
By Fawad Razaqzada, market analyst with FOREX.com
US CPI comes in mixed
June’s CPI rose 0.3% MoM and 2.7% YoY—hotter than the prior 2.4% and above the 2.6% consensus. However, core CPI was a touch weaker, rising 0.2% m/m instead of 0.3%, while the y/y rate was 2.9% as expected.
The mixed CPI report means concerns that inflation may persist longer haven’t changed. The Fed may still delay or reduce the scope of any rate cuts, even if a September move is still on the table.
Adding to the dollar’s appeal, President Trump floated steep tariffs—35% on some Canadian goods and up to 30% on imports from Mexico and the EU—if deals aren’t reached by August 1. These protectionist signals and Trump’s expansive fiscal stance could further stoke inflation, supporting the greenback if confidence in US monetary policy holds.
Pound under pressure
Sterling has had a rough start to the week, extending last week’s 1% drop in GBP/USD before rebounding slightly earlier today. The pound's slide follows a run of soft UK economic data, boosting expectations for a Bank of England rate cut—likely in August. On Friday, data confirmed a second consecutive monthly contraction in the UK economy, driven by a worsening manufacturing slump. This has added to speculation that weakening growth and a stronger pound could help ease imported inflation, especially ahead of Wednesday’s UK CPI release.
Technical picture and key data ahead for GBP/USD
GBP/USD has broken below important support zones (1.3630 and 1.3530–1.3550), now turned resistance. It is currently testing the 1.3434 level, aligned with a key trendline. A breakdown here could open the door to deeper losses toward 1.3370 and potentially the low 1.30s.
Two major data points will guide the pair this week:
• UK CPI (July 16): A soft print would likely reinforce rate cut bets.
• US Retail Sales (July 17): After a May decline, a rebound could highlight US resilience and strengthen the dollar further.
By Fawad Razaqzada, market analyst with FOREX.com
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.