Jan 16, 2023 10:55
The GBP/USD pair is struggling to extend advances above the immediate resistance level of 1.2250 in the early Asian session. The Cable had selling pressure while repeatedly overcoming the aforementioned resistance level, but it is currently likely to extend the uptrend due to a significant increase in market participants' risk appetite.
A four-day winning streak in the S&P 500 suggests a relatively bullish market sentiment. Investors pour capital into perceived-risk assets while dumping perceived-safety assets. Surprisingly, rates on 10-year US Treasury securities rose to 3.50 percent. The US Dollar Index (DXY) was able to minimize its drop at around 101.76.
This week, the Pound Sterling will be affected by the United Kingdom's announcement of inflation data on Wednesday. The headline Consumer Price Index (CPI) (Dec) is anticipated to decline to 10.6% from 10.7% before. While the figures for the core price index, which includes oil and gas prices, may rise from 6.3% to 6.6% over the same time period.
It indicates that UK inflation has become more enduring, and the Bank of England (BOE) will be required to continue raising interest rates. Catherine Mann, a member of the BOE, remarked that the central bank need not be concerned about the possibility of overtightening during its interest rate-raising cycle.
Investors anticipate the publication of Producer Price Index (PPI) data in the United States. The market expects headline factory gate prices of goods and services to decrease from 7.4% to 6.8% in December. Additionally, the core PPI may fall to 5.9% from 6.2% in a comparable era.