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GBP/USD Bounces to Multi-Month Highs on Soft US Inflation

Last week’s high: $1.3110

Last week’s low: $1.2814

Fed Rate Hike Odds Dented by CPI Report

After struggling for much of last week the GBP/USD exchange rate rocketed higher on Friday as the US inflation report reduced the odds of the Federal Reserve increasing interest rates for a third time in 2017. CPI came in at 1.6% on the year, down from inflation of 1.9% in June, and sent the US Dollar tumbling. US retail sales also slumped, helping EUR/USD approach last week’s highs of $1.1487.

USD Outlook: Neutral/Negative

There isn’t much in the way of influential US data to look out for this week, so if US rate hike expectations remain depressed on the back of last week’s inflation and consumer spending reports, GBP/USD may be able to hold its stronger levels.

Key Events

18th July

13:30 US Import/Export Price Index

15:00 US NAHB Housing Market Index

19th July

13:30 US Housing Starts

13:30 US Building Permits

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

Arron Morris
Senior Currency Broker
T: 01442 892 065

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