EUR/GBP Holds Positive Ground Near 0.8450 after UK CPI Data

Economic

Forex

Summary:

EUR/GBP gains momentum to near 0.8445 in Wednesday’s early European session. UK CPI inflation eases to 2.5% YoY in December vs. 2.7% expected. ECB’s Rehn said it makes sense to continue rate cuts.

The EUR/GBP cross extends the rally to around 0.8445 during the early European trading hours on Wednesday. The Pound Sterling (GBP) weakens against the shared currency after the cooler-than-expected UK Consumer Price Index (CPI) inflation data for December. Later on Wednesday, the Eurozone Industrial Production will be released. Also, the European Central Bank (ECB) Vice President Luis de Guindos will deliver a speech on the same day.

Data released by the United Kingdom’s Office for National Statistics on Wednesday showed that the country’s headline CPI rose 2.5% YoY in December, compared to 2.6% in November. This reading came in softer than the 2.7% expected. The Core CPI, which excludes the volatile prices of food and energy, climbed 3.2% YoY in December versus 3.5% prior, below the market consensus of 3.4%. Meanwhile, the monthly UK CPI inflation increased to 0.3% in December from 0.1% in November. Markets expected a 0.4% print.

The Pound Sterling attracts some sellers in an immediate reaction to the downbeat UK CPI inflation data. Additionally, the concerns about the UK's fiscal sustainability and rising bond yields might continue to undermine the GBP. Analysts expect higher borrowing costs may force the government to rein in spending or raise taxes to meet its fiscal rules, potentially weighing on the UK's future growth.

On the Euro front, the ECB delivered rate cuts four times last year, and traders expect three or four moves in 2025 due to the Eurozone's weak economic outlook. This, in turn, could exert some downward pressure on the Euro against the GBP. The ECB Governing Council member Olli Rehn on Monday said, “Against the backdrop of disinflation being on track and the growth outlook having weakened it makes sense to continue rate cuts.”

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Justin

Forex

Economic

The United Kingdom’s (UK) Office for National Statistics (ONS) will release the high-impact Consumer Price Index (CPI) data for December on Wednesday at 07:00 GMT.

The UK CPI inflation report could significantly impact the direction of the Bank of England’s (BoE) interest rates and the Pound Sterling (GBP) amid the persistent turmoil in the global bond market.

What to expect from the next UK inflation report?

The UK Consumer Price Index is expected to increase 2.7% year-over-year (YoY) in December, following a 2.6% growth in November, moving further away from the BoE’s 2.0% target.

Core CPI inflation, which excludes energy, food, alcohol and tobacco, will likely edge a tad lower to 3.4% YoY in December, compared to the 3.5% print reported in November.

According to a Bloomberg survey of economists, official data is expected to show that service inflation fell to 4.8% in December after remaining at 5% in the prior month.

The BoE forecast the annual headline CPI to be 2.5% and the services CPI to be 4.7% for December.

Meanwhile, the British monthly CPI is seen rising 0.4% in the same period, as against the previous growth of 0.1%.

Previewing the UK inflation data, TD Securities analysts noted: “We look for the headline of 2.7% but the more important core and services are likely to see decelerations, especially services, which we expect to fall from 5.0% YoY in November. That said, there remains big uncertainty about airfares, which were likely very weak in the month on account of the survey data.”

How will the UK Consumer Price Index report affect GBP/USD?

The BoE policymakers wrapped up 2024 with a decision to leave the benchmark policy rate unchanged at 4.75% in its December meeting after UK inflation climbed to an eight-month high.

In a dovish tilt, the voting composition was more divided than expected. Three members of the Monetary Policy Committee (MPC) voted to reduce rates, while six favoured a hold. Amidst weak economic prospects, BoE Governor Andrew Bailey said: “We think a gradual approach to future interest-rate cuts remains right. But with heightened uncertainty in the economy, we can’t commit to when or by how much we will cut rates in the coming year.”

The ongoing rout in the UK bond market indicates the bleak economic outlook and increased inflationary concerns in the United States (US) President-elect Donald Trump 2.0 era.

In light of these factors, the stakes are high heading into the December UK CPI data release, as it could alter the market’s pricing of the BoE’s path forward on interest rates.

The hotter-than-expected headline and core inflation data will likely reaffirm the BoE’s gradual easing stance, providing the much-needed respite to the Pound Sterling. In this case, GBP/USD could see a decent recovery from over a year’s low. Conversely, softer-than-expected inflation readings could call for aggressive BoE rate cuts amid a fragile economic situation, smashing the GBP/USD toward sub-1.2000 levels.

Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for the major and explains: “GBP/USD is heavily oversold on the daily time frame ahead of the UK CPI data release, with the 14-day Relative Strength Index (RSI) holding below 30. Therefore, the pair appears primed for a brief recovery in the near term.”

Dhwani adds: “The pair could initiate a meaningful recovery on acceptance above the 1.2300 round level, above which the January 9 high of 1.2367 will be tested. The next upside target is seen at the 21-day Simple Moving Average (SMA) at 1.2462. On the flip side, the immediate support is seen at the 14-month low of 1.2100, below which the 1.2050 psychological barrier will come into play.”

Source：FXStreet

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Alex

Forex

The Indian Rupee (INR) recovers on Wednesday. Any significant depreciation of the INR might be limited, even though the Reserve Bank of India (RBI) adopts a flexible approach to the INR and does not intend to target specific levels for the local currency.

Nonethless, intense demand for the US Dollar (USD), along with a rise in crude oil prices and continued outflows from foreign investors might exert some selling pressure on the INR. Investors will closely monitor the US December Consumer Price Index (CPI) inflation data, which is due later on Wednesday. Also, the Federal Reserve’s (Fed) Thomas Barkin, Neel Kashkari, John Williams, and Austan Goolsbee are scheduled to speak later in the day.

Indian Rupee remains fragile due to global economic factors

The "Trump Tantrum," referring to the impact of Donald Trump's presidency on the Indian Rupee, is likely to be a short-term phenomenon, noted the State Bank of India (SBI).

RBI Governor Sanjay Malhotra has shown a willingness to allow the INR to move more freely in tandem with peers in the region while still intervening in the foreign exchange market to curb excessive moves, per Bloomberg.

India’s Wholesale Price Index (WPI) inflation rose to 2.37% in December from 1.89% in November, according to the Ministry of Commerce and Industry on Tuesday. This figure came in hotter than the expectation of 2.30%.

India’s Consumer Price Index (CPI) rose 5.22% YoY in December, compared to 5.48% in the previous reading, softer than the expectation of 5.3%.

The US PPI rose by 3.3% YoY in December, compared to 3.0% in November, the US Bureau of Labor Statistics reported on Tuesday. This reading came in softer than the market expectation of 3.4%.

The core PPI, excluding the volatile prices of food and energy, climbed 3.5% YoY in December versus 3.4% prior, below the market consensus of 3.8%.

USD/INR’s bullish tone remains in play, overbought RSI warrants caution for bulls

The Indian Rupee trades stronger on the day. The strong uptrend of the USD/INR pair remains in place, with the pair forming higher highs and higher lows while holding above the key 100-day Exponential Moving Average (EMA) on the daily chart. However, the 14-day Relative Strength Index (RSI) moves beyond the 70.00 mark, indicating overbought conditions and warranting some caution. This suggests that further consolidation is on the cards.

The immediate resistance level for USD/INR emerges at an all-time high of 86.69. If buyers hold the line and trading stays above this level, the pair could gear up for another run at the 87.00 psychological level.

On the bearish move, the initial support level for the pair is located at 85.85, the low of January 10. Sustained trading below the mentioned level could drag the pair toward 85.65, the low of January 7, followed by 85.00, a round figure.

Source：FXStreet

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Economic

Forex

EUR/USD remains steady following recent gains registered in the previous session, trading around 1.0300 during the Asian hours on Wednesday. The pair received support as the market sentiment is improved due to recent reports about US President-elect Donald Trump's economic team considering a gradual increase in import tariffs boosted investor confidence, per Bloomberg.

The US Dollar Index (DXY), which measures the US Dollar’s performance against six major currencies, trades near 109.20. The Greenback faced challenges following the disappointing US December Producer Price Index (PPI) data. Market participants will keep an eye on the US Consumer Price Index (CPI) inflation data, which is due later on Wednesday.

US Producer Price Index for final demand rose 0.2% month-over-month in December after a 0.4% advance in November, softer than the 0.3% expected. The PPI climbed 3.3% YoY in December, the most since February 2023, after increasing 3.0% in November. This reading came in below the consensus of 3.4%.

The US Dollar may regain strength as hawkish sentiment builds around the Federal Reserve’s (Fed) policy outlook for January. According to the CME FedWatch tool, 30-day Fed Funds futures indicate a higher likelihood of just one interest rate cut from the Fed this year, contrasting with the two cuts projected in the Fed's latest dot plot from the Summary of Economic Projections (SEP).

The EUR/USD pair may face additional downward pressure as European Central Bank (ECB) officials continue to reinforce market expectations of further policy easing, driven by the Eurozone's weak economic outlook.

At a conference on Monday, ECB policymaker and Bank of Finland Governor Olli Rehn stated that he anticipates monetary policy will exit restrictive territory within the coming months, likely by “midsummer.”

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Owen Li

Forex

USD/CAD stays silent after two days of losses, trading around 1.4360 during the Asian hours on Wednesday. The downside in the USD/CAD pair can be attributed to an improved outlook for foreign currency inflows, reduced US trade concerns, and hawkish expectations for the Bank of Canada (BoC).

Stronger-than-expected Canadian labor market data for December has diminished expectations for near-term interest rate cuts by the BoC. Employment in Canada surged by 91,000 in December, marking the largest gain since January 2023. Additionally, the unemployment rate dropped to 6.7%, down from 6.8% the previous month.

Furthermore, reports indicating the gradual implementation of proposed import tariffs by the incoming Trump administration have eased concerns for Canadian exporters, boosting demand for the Canadian Dollar (CAD).

US Producer Price Index for final demand rose 0.2% month-over-month in December after an 0.4% advance in November, softer than the 0.3% expected. The PPI climbed 3.3% YoY in December, the most since February 2023, after increasing 3.0% in November. This reading came in below the consensus of 3.4%.

Source：FXStreet

Risk Warnings and Disclaimers

Add to Favorites

FastBull Events

Meet Jim Rogers Face-to-Face - Gain Insights into the Future of Global Finance_1

FastBull is proud to announce that legendary economist, investor, and author Jim Rogers will be headlining the FastBull Financial Summit Dubai 2025 as the keynote speaker. Taking place on April 16-17, 2025, at the iconic Coca-Cola Arena in Dubai, this summit is set to be a major gathering for financial professionals, industry leaders, and innovative thinkers. For the first time, attendees will have the chance to hear from Rogers in person as he shares his invaluable insights into the future of global finance.

Why Jim Rogers?

Jim Rogers is renowned for his astute observations on global markets and his pioneering investment strategies. With over five decades of experience in international finance, he has become a widely respected voice in the investment community. Co-founder of the Quantum Fund with George Soros, Rogers is credited with forecasting major financial events and trends. His bestselling books, such as Investment Biker: Investment Biker: Around the World with Jim Rogers, offer profound insights into the dynamics of global markets and the forces shaping the financial world.

Rogers has been an advocate for a diversified investment strategy and a vocal critic of traditional financial systems, making his perspective on the evolving landscape of finance especially relevant in today's fast-changing world. His keynote at the FastBull Financial Summit promises to provide a rare opportunity for professionals to understand the broader implications of global economic trends, particularly in forex markets and blockchain technology.

Networking and Learning from Industry Experts

The FastBull Financial Summit Dubai 2025 is designed to foster collaboration and knowledge sharing. Along with Jim Rogers, a select group of renowned financial experts will be presenting cutting-edge strategies, exploring innovative market trends, and providing actionable insights into the evolving world of finance.

This is not just an event but an opportunity to connect with top-tier professionals and learn from industry leaders who are shaping the future of finance. Whether you're an investor, entrepreneur, or financial executive, the summit offers a platform to expand your knowledge, network with peers, and position yourself at the forefront of the financial revolution.

Stay Tuned for More Updates

Make sure to mark your calendars for April 16-17, 2025, and stay tuned for more exciting updates about the summit. We look forward to welcoming you to Dubai for this landmark event where innovation meets expertise, and the future of global finance is unveiled.

Learn more: https://www.fastbull.com/fastbull-finance-summit-dubai-2025

Risk Warnings and Disclaimers

Add to Favorites

FastBull Featured

Daily News

Economic

[Quick Facts]

1. French Prime Minister calls for political stability as the left-wing party files a no-confidence motion.

2. EIA expects oil prices to be under pressure from oversupply in 2026.

3. Gaza ceasefire deal is close as talks enter final stages.

4. Ryozo Himino says the BOJ will reach a rate decision next week.

[News Details]

French Prime Minister calls for political stability as the left-wing party files a no-confidence motion

French Prime Minister François Bayrou, addressed the National Assembly on January 14, outlining the government's policies in areas such as fiscal budget, industry, agriculture, education, immigration, and healthcare. He called for political stability in France and urged major reforms to return to track swiftly. In December 2024, French President Emmanuel Macron appointed Bayrou as the new Prime Minister, replacing Michel Barnier, who resigned following an impeachment by the National Assembly.

Bayrou faces two major challenges: forming a government that will not face impeachment in the short term and securing approval for the 2025 budget in the Assembly. According to French media, since the July 2024 parliamentary elections, the ruling coalition has lost its previous majority, leading to a tripartite division in the National Assembly among the left-wing, centrists, and far-right. This has created significant obstacles for government policies.

The left-wing party, "France Unbowed," has already submitted a no-confidence motion against Bayrou's government to the National Assembly, which is expected to be voted on as early as January 16.

EIA expects oil prices to be under pressure from oversupply in 2026

The global oil market will face a more severe oversupply in 2026 as OPEC resumes production and output continues to rise in the U.S., Canada, and Guyana, the U.S. Energy Information Administration (EIA) said in its first forecast for next year's oil market.

On Tuesday, the EIA projected an average oversupply of 800,000 barrels per day (bpd) in 2026, more than double this year's predicted 300,000 bpd surplus. Last month, the EIA had forecast a slight supply shortfall for this year. The EIA also noted that oil production from both OPEC members and non-OPEC producers is expected to grow in 2025 and 2026, while oil consumption in OECD countries will slightly decline by 2026.

Gaza ceasefire deal close as talks enter final stages

Gaza ceasefire negotiations are ongoing in Doha and major obstacles have already been resolved, Qatar's Foreign Ministry Spokesperson Majed Al Ansari said on January 14. The parties are now discussing the final details.

The new round of Gaza ceasefire talks resumed in Doha on January 3. Israeli Prime Minister Netanyahu decided on January 11 to send a high-level negotiating team to Doha to finalize an agreement with Hamas on releasing hostages and achieving a ceasefire in Gaza.

Israeli Foreign Minister Gideon Moshe Sa'ar said that significant progress has been made in the ceasefire talks, according to The Times of Israel on January 13. Meanwhile, Palestinian sources reported that Hamas responded positively to the draft agreement on January 13, expressing hope to reach a ceasefire soon and alleviate the suffering of the Palestinian people.

If the details are approved and the Israeli government votes in favor, the agreement could be implemented as early as this weekend.

Ryozo Himino says the BOJ will reach a rate decision next week

The Bank of Japan will debate whether to raise interest rates next week, as prospects of sustained wage gains heighten and the U.S. policy outlook becomes clearer in President-elect Donald Trump's inaugural address, BOJ Governor Ryozo Himino said on Tuesday. The board will carefully study Trump's speech to identify the "balance and timeline" of the new president's policy measures and confirm whether U.S. economic growth will remain robust, Himino added.

The economic and price outlook for Japan carries both upside and downside risks. Monthly increases in import costs are "quite high," partly due to yen depreciation. "We must be ready to shift policy without delay when the time is right," Himino said, adding that the likelihood of Japan's economic performance aligning with the Bank of Japan's forecasts is gradually improving.

[Today's Focus]

UTC+8 16:30 ECB Governing Council Member Villeroy Speaks

UTC+8 17:00 IEA's Monthly Oil Market Report

UTC+8 15:00 UK CPI (Dec)

UTC+8 21:30 U.S. CPI (Dec)

UTC+8 00:00 Next Day: New York Fed President Williams Speaks

UTC+8 00:30 Next Day: Bank of England's MPC Member Taylor Speaks

UTC+8 01:00 Next Day: Chicago Fed President Goolsbee Speaks

UTC+8 03:00 Next Day: Fed's Beige Book

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Daily News

Remarks of Officials

Central Bank

Forex

FastBull Events

FastBull Featured

Devin

Mohammad Omar

Recent Searches

Top Searches

Markets

News

Analysis

User

24/7

Economic Calendar

Education

Data

EUR/GBP Holds Positive Ground Near 0.8450 after UK CPI Data

Source: FXSTREET

UK CPI Expected to Rise in December, Cutting Chances of BoE Rate Cuts

What to expect from the next UK inflation report?

How will the UK Consumer Price Index report affect GBP/USD?

Source：FXStreet

USD/INR Declines Ahead of US CPI Data

Indian Rupee remains fragile due to global economic factors

USD/INR’s bullish tone remains in play, overbought RSI warrants caution for bulls

Source：FXStreet

EUR/USD Steadies Around 1.0300 as US Dollar Remains Subdued Ahead of US CPI

Source: FXSTREET

USD/CAD Remains Subdued Near 1.4350 Due to Reduced US Trade Concerns

Source：FXStreet

Meet Jim Rogers Face-to-Face - Gain Insights into the Future of Global Finance

January 15th Financial News

[Quick Facts]

[News Details]

[Today's Focus]

Risk Disclosure