The Pound Sterling registers modest gains versus the Greenback as US inflation data in the producer side came below or aligned with estimates, revealing that the disinflation process continued.
The GBP/USD trades at 1.3503, up 0.06%
GBP/USD firms as softer US PPI bolsters Fed hold expectations Data from the US has weakened the Greenback, as indicated by the US Dollar Index (DXY): the DXY, which tracks the performance of six currencies against the Greenback, is down 0.14% to 99.83. The US Producer Price Index (PPI) in July ticked lower from 5.5% to 4.7% YoY, below forecasts of 4.9%. Core figures, which exclude volatile items, decreased as expected from 4.7% to 4.2% YoY.
At the same time, the US Department of Labor revealed that Initial Jobless Claims for the week ending August 8 rose from 200K to 208K, above estimates of 202K Recent US jobs data have suggested that the labor market remains solid but have also shown some signs of weakness. This, along with July’s benign inflation readings on the consumer and producer sides, might prevent an interest rate hike by the Federal Reserve at the September 16 meeting. Money markets continued to price in a 60% chance of a Fed hold at the September meeting, with a slim chance of a 25-basis-point rate hike.