GBP/USD rebounded on Wednesday, moving back above the 1.2600 mark, as the US Dollar retreated due to improved risk sentiment following news of progress in development of a potential COVID-19 vaccine. The Pound also benefited from a surprisingly upbeat UK CPI inflation report, released earlier Wednesday.
Several news media reported that Moderna Inc’s experimental COVID-19 vaccine had showed it was safe and triggered immune responses in all 45 healthy volunteers during an early-stage study.
Tuesday’s better-than-expected CPI inflation numbers from the United States also contributed to market optimism.
Meanwhile, a report by the UK Office for National Statistics showed annual CPI inflation had accelerated to 0.6% in June from a four-year low of 0.5% in May, supported by a 2.6% surge in cost of recreation and culture (computer games and games consoles, in particular). Analysts on average had expected a slowdown in consumer inflation to 0.4%.
Annual Core CPI inflation, which does not take into account volatile categories such as energy, food, alcoholic beverages and tobacco, accelerated to 1.4% in June from 1.2% in May.
As of 11:35 GMT on Wednesday GBP/USD was gaining 0.58% to trade at 1.2626, after earlier touching an intraday high of 1.2635, or a level not seen since July 13th (1.2666). The major pair has trimmed earlier losses, now being down 0.02% so far this week, following two consecutive weeks of gains.
In terms of economic calendar, a report by the Board of Governors of the Federal Reserve at 13:15 GMT may show industrial production in the country expanded at a monthly rate of 4.3% in June, according to market expectations, after rising 1.4% in May. Manufacturing output probably rose 5.6% in June from a month ago, following a 3.8% surge in May.
At 16:00 GMT Federal Reserve President for Philadelphia Patrick Harker is expected to speak on US economic outlook at a Center City Proprietors Association online event.
At 18:00 GMT the Federal Reserve Bank is to release its ”Beige Book” report, which is published eight times during the year. Each of the banks in the 12 Federal Reserve Districts gathers data in regard to current economic situation in the country on the basis of interviews with key business contacts, economists, market experts and other sources.
Bond Yield Spread
The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, equaled 24.9 basis points (0.249%) as of 10:15 GMT on Wednesday, down from 26.7 basis points on July 14th.
Daily Pivot Levels (traditional method of calculation)
Central Pivot – 1.2532
R1 – 1.2584
R2 – 1.2616
R3 – 1.2668
R4 – 1.2720
S1 – 1.2501
S2 – 1.2449
S3 – 1.2417
S4 – 1.2386
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
