GBP/USD retreats after hitting daily highs above 1.3850

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  • US Dollar mixed across the board, finds support from rebound in US yields.
  • UK: PM Johnson changes members of his Cabinet.
  • GBP/USD holds onto daily gains, remains unable to break 1.3900.

The GBP/USD printed a fresh daily high during the American session at 1.3853 and then pulled back toward 1.3820. It is hovering around 1.3840, in positive ground for the day. Cable continues to move sideways, with support around 1.3800 and unable to confirm levels above 1.3900.

Data and cabinet reshuffle

UK Primer Minister Boris Johnson made changes to his cabinet. Liz Truss will be the Foreign Secretary, and Dominic Raab will become Justice Secretary. Robert Buckland, Robert Jenrick and Gavin Williams will leave the Cabinet office.

Earlier on Wednesday, economic data from the UK showed higher than expected inflation numbers. In August the CPI rose 3.2% (YoY). The numbers boosted the pound only modestly.

“The next focus for GBP will be tomorrow’s release of August retail sales.  This is expected to bounce by 0.8% m/m after the -2.4% m/m plunge registered in July.  That number prompted speculation that much of the lockdown related pent up demand in the UK has run its course.  Tomorrow’s data will likely be key in setting that tone ahead of the September 23 BoE policy meeting”, wrote analysts at Rabobank.

Technical levels