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The Dollar retreated from earlier highs after U.S. inflation met expectations.
The Pound to Dollar (GBP/USD) rose exchange rate after U.S. CPI inflation rose to 2.7% in November, as expected, but this was up from 2.6% in October, making for the fifth consecutive increase.
This is as CPI rose 0.3% month-on-month, also in line with expectations.
Core CPI printed at 0.31% in November, holding the 12-month rate at 3.3%, which met analyst predictions.
The key takeaways are inflation is proving stubborn, which will limit the pace at which the Federal Reserve will cut interest rates in 2025.
However, the Federal Reserve will likely proceed with another interest rate cut next week because the figures have met expectations.
"This should be enough for the Federal Reserve to cut rates again in December," says Jeroen Blokland, Founder of the Blokland Smart Multi-Asset Fund.
Fed cut pricing for next week up to 95% from 85% with all the CPI data in line.
The overlay is that the Dollar can remain under near-term pressure as the strong October-November rally unwinds, but multi-month it can remain strong.
An original version of this article can be viewed at Pound Sterling Live