The GBP/USD is virtually unchanged amid a volatile session that witnessed the pair traveling at around 90 plus pip range, directionless after a report of inflation in the United States (US). Initially boosted the Pound Sterling (GBP), but in the end, the Greenback (USD) was bolstered. The pair is trading at 1.2556, almost flat. The major is trading within familiar ranges after the US Bureau of Labor Statistics (BLS) announced inflation is declining, even though monthly figures were slightly up in headline and core inflation. The Consumer Price Index (CPI) in November was 3.1% YoY but rose 0.1%, exceeding forecasts of 0%. The so-called core CPI met estimates of 4% YoY and monthly readings of 0.3%, up from October’s.
Earlier in the UK London session, the Office for National Statistics (ONS) revealed the jobs market is easing, with 50K new employees added to the workforce, though wages were lower than the 7.7% estimates, came at 7.2%. Meanwhile, the US Dollar Index (DXY) resumed its downtrend after pairing earlier losses sustained on the US inflation report. The DXY is down 0.20%, at 103.88, while US Treasury bond yields remain flat. In the meantime, the Federal Reserve would begin its two-day monetary policy meeting that would end tomorrow, with the statement release and the Chairman Jerome Powell press conference. Most market participants expect the Chair to push back against monetary policy easing. On Thursday, it would be the turn of the Bank of England (BoE), with Governor Andrew Bailey and Co., estimated to deliver a hawkish hold and to keep rates unchanged. Given the backdrop, the GBP/USD is expected to remain within familiar levels. Unexpected surprises would increase volatility in the pair, with only three weeks left to finish the year. The daily chat portrays the pair is forming a doji, meaning that indecision lies amongst traders. Upside risks would emerge above today’s high of 1.2615, which could pave the way for testing 1.2700. Otherwise, if prices slump below 1.2518, could pave the way to test the 200-day moving average (DMA) at 1.2491.
