Attracting Sales and Reaching High Levels

The pair of the British Pound and Us Dollar currencies oscillated between relative gains and slight losses as it went on in the early part of the European session and were observed to trade in neutral territory in the vicinity of 1.3000 psychological benchmarks at the time of putting this report out.

GBP/USD price chart. Source TradingView

The pair was well able to draw a level of purchases on Wednesday, and it reached a high level the intraday at 1.3025 after the publication of the United Kingdom’s consumer inflation report which turned out to be hotter than what was expected. The United Kingdom’s Office of National Statistics stated that the headline consumer price index increased from 6.2%, which it struggled to be at in February, to a 7% year-on-year increase in the month of March, taking it to the highest height it has been since 1992.

In addition to the aforementioned, the central consumer price index, which does not include the current increase in the prices of food and energy, increased to 5.7% year-on-year from the initial 5.2% that was published in the month of February, and it gave a modest lifting to the pound sterling. That said, there was a confluence of factors that came together to hold off bullish traders from staking aggressive bets, and it put a firm lid on further significant gains ascribed to the GBP/USD currency pair.

US PPI Under the Radar

There had been a reversal to dovish territory for the Bank of England as it changed its tone around the need for more interest rate increases in the future. This came as a result of the increased worry over the possibility of an economic fallout that could arise from the ongoing war between Russia and Ukraine. This condition, as well as the bullish sentiments revolving around the US dollar, triggered some intraday sales and pulled the GBP/USD currency pair down to its barest point for the first time since last November.

The US dollar rose almost to a peak of two years, and it kept getting considerable support from public expectations that the Federal Reserve is going to implement a more aggressive monetary policy to fight escalating inflation rates. The market’s speculation was reaffirmed when the Reserve’s Governor said that the central bank is going to implement a number of increases in interest rates and also make efforts to cut down its balance sheet.

The market now looks forward to reports from the US PPI, which would be released in the course of the North American session. It is expected to influence the US dollar and give more momentum to the GBP/USD currency pair.