GBP/USD flirts with nine-week high amid UK inflation decline

The GBP/USD pair has surged by over 0.35% during the mid-North American trading session, reaching a peak at 1.2517 before stabilizing at 1.2495.

Market odds suggest a less than 10% chance of a rate hike by June 2024, with speculation suggesting the Bank of England may have ended its monetary policy tightening cycle.

If the pair closes above 1.2700, it may test 1.2700, but if not, a retreat towards 1.2400 is anticipated. The first rate cut is priced in for June 2024, with odds of a rate hike being less than 10%.

UK Prime Minister Rishi Sunak announced tax reductions following inflation decline, while chancellor Jeremy Hunt plans to revitalize the economy.

The Leading Index fell more than anticipated, indicating a slowdown due to worsening business and consumer conditions, declining ISM Index for New Orders, and a pessimistic outlook.

Buyers of GBP/USD are predicted to test the peak from September 11 at 1.2548 before the 1.2600 mark.