GBP/USD rebounds from session lows and trades marginally higher on the day above 1.3550. The renewed selling pressure surrounding the USD following the inflation and Jobless Claims data help the pair gain traction in the American session.
Although the US Dollar (USD) came under bearish pressure with the immediate reaction to the weaker-than-expected Producer Price Index (PPI) data for August on Wednesday, the cautious market stance helped the currency find support and made it difficult for GBP/USD to gain traction.
During a meeting of government ministers on Wednesday, Britain's finance minister Rachel Reeves said that the government was focused on going further to support the Bank of England (BoE) in reducing inflation, controlling public spending and driving growth, Reuters reported, citing a Downing Street spokesperson. This headline failed to trigger a noticeable market reaction.
In the second half of the day, the Bureau of Labor Statistics (BLS) will publish the Consumer Price Index (CPI) data for August. On a monthly basis, the core CPI, which excludes volatile food and energy prices, is forecast to rise by 0.3%.
According to the CME FedWatch Tool markets are currently fully pricing in a 25 basis-points (bps) Federal Reserve (Fed) rate cut in September. Although the inflation data is unlikely to change markets' mind about next week's policy decision, it could influence the USD's valuation and the pair's action in the immediate term.
A soft print in the monthly core CPI could hurt the USD and help GBP/USD turn north. On the flip side, an increase of 0.5%, or higher, in this data could weigh on the pair.
Source: Fxstreet
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