Despite the higher-than-expected CPI reading, attention should be paid to the pound’s performance against the U.S. dollar

Despite the higher-than-expected CPI reading, investors should keep an eye on the pound’s performance against the U.S. dollar, which has weakened.

15.08.2024

In the previous day’s U.S. currency trading, the Canadian dollar strengthened against Oceania currencies. The AUD/CAD pair fell from 0.9105 to 0.9035, marking a pullback from this month’s high.On the 4-hour chart, the pair has pulled back from the 200-day SMA, and on the daily chart, it failed to break above the 20-day MA and was pushed back down. We will need to watch price action during U.S. trading hours to see if the Canadian dollar continues to strengthen against the Australian dollar.

European currencies saw the pound weaken against the U.S. dollar, despite yesterday’s release of the UK’s July Consumer Price Index, which rose to 2.2% year-on-year from 2.0% the previous month. The GBP/USD pair fell from 1.2868 to 1.2815. On the hourly chart, the price has moved from above the 20-period moving average to below it.On the 4-hour chart, the price has pulled back from the +3σ line of the Bollinger Bands, and on the daily chart, the RSI has declined from 54 to 51.

Today’s schedule includes Japan’s real GDP at 8:50, China’s new home sales prices and Australia’s employment data at 10:30, China’s industrial production and retail sales at 11:00, and the UK’sIndustrial Production, at 3:30 PM: Switzerland’s Trade Balance, at 9:30 PM: Canada’s Wholesale Sales, U.S. Initial Jobless Claims, U.S. Retail Sales, U.S. Import Price Index, and U.S. Philadelphia Fed Manufacturing Index, and at 11:00 PM: U.S. NAHB Housing Market Index and U.S. Business Inventories.We will closely monitor the pound’s movements, as it has weakened against the US dollar despite the CPI coming in higher than expected.