Skip to content GBPUSD Fundamental Analysis – 10-June-2024
GBP/USD—The British pound recently climbed above the $1.275 mark, bouncing back from the $1.27 level seen on May 29th, reaching new five-week highs. This surge was driven by the latest PCE inflation data from the United States, which signaled to investors that the Federal Reserve might be flexible to cut interest rates this year.
Core PCE Prices Slow Down in April
In April, the core PCE prices showed a slower increase compared to March, while the overall monthly and yearly rates stayed steady, aligning with expectations.
Sunak’s Election Shifts Rate Cut Timing
On the other side of the Atlantic, the UK’s annual inflation rate decreased to 2.3%, edging closer to the Bank of England’s target of 2% but still above the predicted 2.1%. This has led investors to adjust their expectations, anticipating the Bank of England’s first rate cut in September rather than June.
This shift was further influenced by Prime Minister Rishi Sunak’s surprise announcement of a general election in early July, which diminished the likelihood of a June rate cut.
September Rate Cut Likely for UK
Although the Bank of England maintains its stance on independence, past allegations of political interference have led markets to believe that a September rate cut is more probable. This dynamic landscape underscores the importance of staying informed on economic indicators and political events to make well-informed financial decisions.
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