British Pound Stabilizes
London: 14 November 2023 (TraderMade): The British pound maintained stability on Tuesday as investors awaited crucial US inflation data, anticipated to influence the dollar's short-term trajectory against other currencies.
The GBPUSD closed yesterday at 1.22795. At about 12:15 PM GMT, the pair was at 1.22904. Thus, we can see a 0.089% increase in the exchange rate.
Economic factors behind the stability
Earlier in the day, UK labor data revealed a slight slowdown in wage growth for the three months ending September, though it remained near a record pace. However, these figures are unlikely to alleviate the Bank of England's concerns about inflationary pressures, leaving market predictions for a UK rate cut in June 2024 unchanged.
With major central banks concluding interest rate hikes, attention has shifted to potential rate cuts. The upcoming US inflation report on Tuesday is expected to play a more decisive role in shaping the immediate outlook for the pound.
Despite surrendering some gains this year, the pound and the Swiss franc remain the two G10 currencies still in positive territory against the dollar in 2023, with a 1.6% increase.
Wednesday's UK Consumer Price Index (CPI) is projected to reveal a slowdown in inflation to an annual rate of 4.8% in October, down from September's 6.7%. The Bank of England's record 5.15 percentage point interest rate increase over 22 months may see a counterbalance if inflation eases, especially given the cooling wage growth trend.
