GBPUSD Edges Lower
GBPUSD Edges Lower
Following a day of weakness, the U.S. dollar is back into green against the major currencies. The British Pound is no exception, which is trading down by 0.85% to 1.5947. The currency pair has support and resistance levels at 1.5941 and 1.6128 as per its last high and low peaks.
U.K. CPI Falls
The weakness in Sterling comes on the backdrop of declining inflation data. In a report issued by the U.K. Office for National Statistics, the consumer price inflation rate slowed down to 1.2% in September as against the reading of 1.5% in August. The analysts had estimated the CPI to tick down to 1.4% in September. On a month-over-month basis, the consumer price inflation remains flat in September, while it increased at the rate of 0.4% in August. At the same time, the core CPI, which does not include energy, food, alcohol and tobacco increased at a rate of 1.5% in September, against 1.9% in August. As per analysts, the same should have increased to 1.8% in September.
Also, the GBP remains weak broadly on account of the spread of Ebola epidemic. The U.K. government announced yesterday that it will start screening passengers at its Heathrow airport for Ebola. U.K.’s Health Secretary Jeremy Hunt expressed concern that Ebola virus could reach the region by the end of the year.
The U.S. Dollar remains supported amid concerns that the global growth will remain low. The International Monetary Fund has already trimmed its growth expectations for the year 2014 and 2015. The market players in the U.S. have been optimistic that the Federal Reserve will consider hiking interest rates on the backdrop of visible economic recovery. However, the Fed has sidelined the notion for the time being indicating that the rate hike will be adopted at a slower pace than expected.
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