The
Pound
Sterling
(GBP)
surges
above
the
round-level
resistance
of
1.2900 against
the
US
Dollar
(USD)
in
Thursday’s
American session.
The
GBP/USD
pair
strengthens
as
the United
States
(US)
Consumer
Price
Index
(CPI)
for
June
showed
that
price
pressures
softened
more
than
expected
in
June.
Annual
headline
and
core
CPI,
which
strips
off
volatile
food
and
energy
prices,
decelerated
to
3%
and
3.3%,
respectively.
Monthly
headline
inflation
deflated
by
0.1%,
while
economists
forecasted
growth
at
a
similar
pace.
The
core
CPI
grew
at
a
slower
pace
of
0.1%
from
the
estimates
and
the
prior
release
of
0.2%.
Softer-than-expected
US
inflation
data
has
boosted
expectations
of
early
rate
cuts
by
the Federal
Reserve (Fed)
and
has
weighed
heavily
on
the
US
Dollar. The
US
Dollar
Index
(DXY),
which
tracks
the
Greenback’s
value
against
six
major
currencies,
weakens
to
June’s
low
near
104.00.
The
Cable
was
already
upbeat
due
to
multiple
tailwinds,
such
as
weakness
in
the
US
Dollar
due
to
firm
speculation
that
the
Fed will
begin
reducing
interest
rates
in
September
and
an
upbeat
outlook
for
the
British
currency
amid
easing
Bank
of
England’s
(BoE)
early
rate
cut
bets
and
strong
United
Kingdom
(UK)
Gross
Domestic
Product
(GDP)
report
for
May.
The
expectations
for
Fed
rate
cuts
were
higher
as Fed
Chair
Jerome
Powell
signaled
some
disinflation
progress
in
his
semi-annual
Congressional
testimony
comments.
Powell
refrained
from
announcing
a
victory
over
inflation
but
assured
that
policymakers
are
very
focused
on
the
path
toward price
stability.
The
table
below
shows
the
percentage
change
of
British
Pound
(GBP)
against
listed
major
currencies
today.
British
Pound
was
the
strongest
against
the
US
Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.52% | -0.62% | -1.62% | -0.11% | -0.58% | -0.67% | -0.75% | |
EUR | 0.52% | -0.10% | -1.11% | 0.43% | -0.06% | -0.13% | -0.21% | |
GBP | 0.62% | 0.10% | -1.03% | 0.54% | 0.04% | -0.03% | -0.10% | |
JPY | 1.62% | 1.11% | 1.03% | 1.60% | 1.12% | 1.00% | 0.97% | |
CAD | 0.11% | -0.43% | -0.54% | -1.60% | -0.51% | -0.60% | -0.63% | |
AUD | 0.58% | 0.06% | -0.04% | -1.12% | 0.51% | -0.08% | -0.14% | |
NZD | 0.67% | 0.13% | 0.03% | -1.00% | 0.60% | 0.08% | -0.06% | |
CHF | 0.75% | 0.21% | 0.10% | -0.97% | 0.63% | 0.14% | 0.06% |
The
heat
map
shows
percentage
changes
of
major
currencies
against
each
other.
The
base
currency
is
picked
from
the
left
column,
while
the
quote
currency
is
picked
from
the
top
row.
For
example,
if
you
pick
the
British
Pound
from
the
left
column
and
move
along
the
horizontal
line
to
the
US
Dollar,
the
percentage
change
displayed
in
the
box
will
represent
GBP
(base)/USD
(quote).
The
Pound
Sterling
moves
higher
above
the
round-level
resistance
of
1.2900 against
the
US
Dollar.
The
GBP/USD
pair
is
expected
to
extend
its
upside
after
delivering
a
breakout
of
an inverted
Head
and
Shoulder
(H&S)
formed
on
a
daily
timeframe.
The
neckline
of
the
above-mentioned
chart
pattern
is
plotted
near
1.2850,
and
a
breakout
of
the
H&S
formation
results
in
a
bullish
reversal.
Advancing
20-day
Exponential
Moving
Average
(EMA)
near
1.2747 suggests
that
the
near-term
trend
is
bullish.
The
14-day
Relative
Strength
Index
(RSI)
established
into
the
bullish
range
of
60.00-80.00,
indicating
that
the
momentum
has
leaned
to
the
upside.
Monetary
policy
in
the
US
is
shaped
by
the
Federal
Reserve
(Fed).
The
Fed
has
two
mandates:
to
achieve
price
stability
and
foster
full
employment.
Its
primary
tool
to
achieve
these
goals
is
by
adjusting
interest
rates.
When
prices
are
rising
too
quickly
and
inflation
is
above
the
Fed’s
2%
target,
it
raises
interest
rates,
increasing
borrowing
costs
throughout
the
economy.
This
results
in
a
stronger
US
Dollar
(USD)
as
it
makes
the
US
a
more
attractive
place
for
international
investors
to
park
their
money.
When
inflation
falls
below
2%
or
the
Unemployment
Rate
is
too
high,
the
Fed
may
lower
interest
rates
to
encourage
borrowing,
which
weighs
on
the
Greenback.
The
Federal
Reserve
(Fed)
holds
eight
policy
meetings
a
year,
where
the
Federal
Open
Market
Committee
(FOMC)
assesses
economic
conditions
and
makes
monetary
policy
decisions.
The
FOMC
is
attended
by
twelve
Fed
officials
–
the
seven
members
of
the
Board
of
Governors,
the
president
of
the
Federal
Reserve
Bank
of
New
York,
and
four
of
the
remaining
eleven
regional
Reserve
Bank
presidents,
who
serve
one-year
terms
on
a
rotating
basis.
In
extreme
situations,
the
Federal
Reserve
may
resort
to
a
policy
named
Quantitative
Easing
(QE).
QE
is
the
process
by
which
the
Fed
substantially
increases
the
flow
of
credit
in
a
stuck
financial
system.
It
is
a
non-standard
policy
measure
used
during
crises
or
when
inflation
is
extremely
low.
It
was
the
Fed’s
weapon
of
choice
during
the
Great
Financial
Crisis
in
2008.
It
involves
the
Fed
printing
more
Dollars
and
using
them
to
buy
high
grade
bonds
from
financial
institutions.
QE
usually
weakens
the
US
Dollar.
Quantitative
tightening
(QT)
is
the
reverse
process
of
QE,
whereby
the
Federal
Reserve
stops
buying
bonds
from
financial
institutions
and
does
not
reinvest
the
principal
from
the
bonds
it
holds
maturing,
to
purchase
new
bonds.
It
is
usually
positive
for
the
value
of
the
US
Dollar.
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