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Apr 11 - 12:55 PM

ANZ: GBP/USD Outlook Dimmed by Upcoming UK CPI and Employment Data Next Week

By eFXdata  —  Apr 11 - 10:45 AM


ANZ forecasts a subdued outlook for GBP/USD in the upcoming week, attributing potential weakness to forthcoming CPI and employment data. Signs of slackening within the UK labor market, alongside expectations of softer average earnings, are poised to exert pressure on the GBP. However, recent responses to CPI data indicate that market reactions to weaker inflation figures have become more muted, suggesting an acceptance of the declining inflation trend. Despite this, dovish signals from the Bank of England (BoE) meetings retain the capacity to impact GBP negatively.

Key Points:

  • Labor Market Cooling: Emerging indicators hint at a gradual softening in the UK job market, with rising jobless claims and forecasts of dampened employment growth, albeit PMI employment metrics remain stable.
  • Wage and CPI Data Influence: The forthcoming average earnings report is anticipated to impact GBP, reflecting the importance of wage dynamics on currency valuations.
  • Muted CPI Reaction: A notable shift in market behavior shows less pronounced reactions to recent softer CPI figures, indicating a market adjustment to the expected downward inflation trajectory.
  • BoE's Role: While the direct influence of CPI data may be waning, dovish stances from the BoE continue to pose risks to GBP strength, underscoring the significance of central bank communications.


ANZ anticipates a challenging week for GBP/USD, driven by key economic releases that are unlikely to favor the GBP. Although market responses to inflation data have moderated, suggesting an acclimatization to lower inflation rates, the BoE's policy direction remains a critical factor for the GBP's performance. Investors and traders will need to monitor both economic indicators and central bank cues closely in the week ahead.

ANZ Research/Market Commentary


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