Currency news / July 16, 2025

Hot CPI supports GBP

3 min read Thanim Islam

Thanim IslamJuly 16, 2025

Market snapshot:

Markets back to pricing-in two rate cuts from the UK
US CPI numbers see markets reduce the odds of a second rate cut stateside

Yesterday's currency recap

USD gains continued late in the day, despite a mixed US CPI report where the core component came in lower than expected for the 5th consecutive month. Initial USD gains were sold into, as markets actually reduced the odds of a second rate cut by the Fed this year from a 100% down to 75% probability.

At the time of writing, GBPUSD was sat at the low of June, a key support level for the pair.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.26%	2.0568
GBPCAD	-0.12%	1.8378
GBPCHF	0.21%	1.0738
GBPDKK	0.30%	8.617
GBPEUR	0.30%	1.1546
GBPJPY	0.55%	199.458
GBPNOK	0.88%	13.7407
GBPNZD	0.23%	2.2535
GBPSEK	0.92%	13.0316
GBPUSD	-0.28%	1.339

*Daily move - against G10 rates at 7:00 am, 16.07.25
** Indicative rates - interbank rates at 7:00 am, 16.07.25

Key data points

Currency	Event	Period	Consensus	Previous
USD	PPI MoM	Jun	0.20%	0.10%
USD	PPI YoY	Jun	2.50%	2.60%
USD	Core PPI MoM	Jun	0.20%	0.10%
USD	Core PPI YoY	Jun	2.70%	3.00%

What we think

Following hotter than expected CPI numbers, we’re back to markets only projecting two rate cuts from the Bank of England this year. Month-on-month CPI came in at 0.3% vs the expected 0.1%; and 3.6% vs 3.4% year-on-year. Services CPI came in at 4.7%. As a result, GBP is marginally up across the board, as we wait for the job numbers tomorrow morning. In light of these numbers, we would expect the recent sell-off on GBP to ease today. Demand could well pick up the currency should we have strong job numbers in the morning.

A report overnight suggests that Kevin Hassett is the frontrunner to replace Jerome Powell as Fed Chair, and, on the tariff front, that Trump is set to impose tariffs on pharmaceuticals as early as 1st August.

PPI inflation numbers are out at 1.30pm today - a hot number could also fade second rate cut odds and give further demand for USD.

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