In the US Inflation increased to 3.2% on an annual basis in July, up from 3% in June, according to the US Bureau of Labor Statistics (BLS) on Thursday. This number was slightly below than the market expectation of 3.3%.
The magazine also indicated that Core CPI , which excludes volatile food and energy costs, fell to 4.7% from 4.8%. The CPI and Core CPI both gained 0.2% on a monthly basis, confirming analysts’ expectations.
Market reaction on US inflation
The US Dollar came under heavy selling pressure as a result of the instant reaction. The US Dollar Index, which measures the value of the US dollar against a basket of six major currencies, fell 0.6% on the day to 101.85.
Pound sterling (GBP) is rapidly rising as the market sentiment improves.
The pound sterling (GBP) is rapidly rising as the market sentiment improves. For the time being, the GBPUSD pair is well supported. As investors expect that the British economy would avoid recession thanks to lowering inflationary pressures and dropping consumer expenditure. Domestically, Friday’s industrial statistics and Q2 GDP figures will be closely watched.
Investors want to know how well enterprises are dealing with the impact of the Bank of England’s (BoE) rising interest rates. Despite extremely restrictive monetary policy, market participants expect the United Kingdom’s GDP to grow in the April-June quarter. Furthermore, production activity remained on a recovery path, reflecting the economy’s resiliency.
https://voiceoftraders.com/analysis/audusd-oscillates-after-a-strong-recovery-around-0-6560
