The GBP persisted in a range-bound manner against the US dollar yesterday on the announcement of robust economic data from both the UK and the USA. While the UK’s consumer price inflation data for September surpassed estimates, the US building permits unexpectedly increased in August. The GBP/USD pair remained range-bound between 1.1220 and 1.1360 over the past 24 hours.
The ONS (Office for National Statistics) data states that the UK’s consumer price inflation surged 10.10% y-o-y in September, following a 9.90% rise in the prior month, and a little higher than the 10% growth anticipated by economists. The reported figure matches the four-decade-high inflation recorded in July.
On an m-o-m basis, the UK’s CPI inched up 0.50% in September.
Excluding energy, food, alcohol, and tobacco, core consumer price inflation grew by 6.50% y-o-y in September, from 6.30% in August, and a notch higher than the 6.40% rise anticipated by economists.
In a separate news release, the UK Office for National Statistics stated that the country’s PPI (producer price input) grew by 0.40% m-o-m in September, following a decline of 1.20% in the preceding month, and pleased economists who were expecting a 0.40% drop in the PPI.
On a year-over-year basis, the PPI surged 20% in September 2022, a decrease from 20.90% in August. The stated figure reflects the third successive monthly decline.
The ONS also stated that the PPI output inched up 0.20% m-o-m in September 2022, following a decrease of 0.10% in the earlier month, but missed the 0.40% increase anticipated by economists. On a year-over-year basis, the PPI output surged 15.90% in September, a decrease from 16.40% in August.
Service producer prices increased 6.60% in the year to September 2022 quarter, an increase from 5.40% in the year to June 2022 quarter.
According to the US Census Bureau, the country’s building permits were 1,564,000 units in September, up 1.40% from 1,542,000 in August. Economists had anticipated a decline in the number of building permits to 1,520,000 units. The reported figure is 3.20% lower than the 1,615,000 units reported for September 2021.
Single-family authorizations were 872,000 units in September 2022, down 3.10% from 900,000 units in August.
The Census Bureau also stated that housing starts declined by 8.10% to 1,439,000 units in September, from 1,566,000 units in August, and missed forecasts for 1,460,000 units. The reported figure is 7.70% lower than the 1,559,000 units in September 2021. Single-family housing starts were 892,000 in September 2022, down 4.70% from 936,000 units in August.
Also, privately-owned housing completions were 1,427,000 units in September, up 6.10% from 1,345,000 units in August and 15.70% above the 1,233,000 units in September 2021.
The solid economic data from both countries are likely to keep the GBP/USD pair range-bound with a slight bearish bias in the near future.
Technically, the GBP/USD duo is descending after failing to break the resistance at 1.1440. The next support is anticipated near 1.1110. The money pair is trading below its 50-day moving average while the stochastics indicator is in the bearish region. We predict that the GBP/USD pair will continue in a downtrend in the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
