Anna 
During Wednesday’s London session, the Pound Sterling (GBP) surged to a fresh weekly high, reaching the round-level resistance of 1.2600 against the US Dollar (USD). The GBP/USD pair maintained its strength as the US Dollar weakened in anticipation of the upcoming United States Consumer Price Index (CPI) data for April, scheduled for release at 12:30 GMT. Concurrently, the US Dollar Index (DXY), which measures the dollar’s performance against a basket of six major currencies, fell below the critical support level of 105.00.
Economists’ forecasts suggest that monthly headline inflation likely remained steady at 0.4%. However, the core CPI, which excludes volatile food and energy prices, is expected to have risen at a slower pace of 0.3% in April, down from March’s 0.4%. Annual headline CPI is projected to soften to 3.4% from 3.5% in March, while core inflation is anticipated to decelerate to 3.6% from the prior reading of 3.8%.
The outcome of the inflation data will significantly influence speculation regarding Federal Reserve (Fed) interest-rate adjustments. Currently, financial markets anticipate that the Fed will consider initiating interest-rate cuts starting from the September meeting. In addition to the inflation figures, investors will closely monitor the monthly Retail Sales report for April, a crucial indicator of household spending that can offer insights into the inflationary outlook. Retail Sales are expected to have grown at a slower rate of 0.4%, down from a 0.7% increase recorded in March.
