US CPI strengthens the USD
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Daily Currency Update
U.S. core CPI, excluding volatile food and energy prices, held steady at 3.2% in August, in line with market expectations. On a monthly basis, both CPI and core CPI increased by 0.2% and 0.3%, respectively, surpassing forecasts. This has reduced the likelihood of a 50-basis-point rate cut by the Federal Reserve, with the market now pricing in an 85% chance of a 25-basis-point cut. The news strengthened the U.S. dollar, driving GBP/USD down from 1.3090 to a session low of 1.3000, and pushing EUR/USD from 1.1050 to 1.1000. Both pairs have seen some recovery since.Key Movers
Today's focus will be on the European interest rate decision, with the market already expecting a 25-basis-point cut by the European Central Bank. The key driver of volatility will likely be President Christine Lagarde's comments, particularly any guidance on potential rate cuts in October and December. Additionally, U.S. monthly PPI data and unemployment claims are also scheduled for release today.Expected Ranges
- GBP/USD: 1.3000 - 1.3110 ▼
- GBP/EUR: 1.1810 - 1.1880 ▲
- GBP/AUD: 1.9480 - 1.9640 ▼
- EUR/USD: 1.0980 - 1.1100 ▼