- GBP/USD is juggling between 1.2484 and 1.2496 as investors await UK inflation.
- UK annual CPI is estimated at 9.1% vs. 7% previously.
- Pound bulls gained strength on the upbeat market sentiment and jobs data.
GBP/USD trades back and forth in a narrow range of 1.2484-1.2496 in Asian session as investors sidelined ahead of Consumer Price Index figures (CPI) in the UK on Wednesday. According to the market consensus, the annual inflation figure is eyeing the roof. The annual CPI figure is estimated at 9.1%, potentially higher than the previous print of 7%. While the annual core CPI would jump to 6.2%, against 5.7% previously.
A higher UK inflation reading is compelling for more rate hikes by the Bank of England (BOE) in upcoming monetary policy meetings. It would be fair to say that BOE Governor Andrew Bailey might come up with a giant rate hike to contain the inflation mess. Inflation is expected to be skyrocketing in the UK zone and the BOE must take certain quantitative measures to safeguard household paychecks.
Meanwhile, jobless claims in the sterling area fell sharply by 56.9k, above expectations of 38.8k. Additionally, the monthly ILO unemployment rate improved to 3.7% from the consensus and previous print of 3.8%.
On the dollar front, the US Dollar Index (DXY) is hovering around 103.30 and is expected to decline amid improving risk appetite among market participants. The odds of a massive rate hike by the Federal Reserve (Fed) in June rise sharply as the Fed focuses on stabilizing prices sooner. Fed Chairman Jerome Powell said in a Wall Street Journal Q&A that inflation should be “compellingly” dropped.