Pound Sterling Price News and Forecast: GBP/USD jumped around 0.4% in European trading on Wednesday
|British Pound gains ground as UK inflation rises
The British pound has edged higher after UK inflation rose unexpectedly in December. In the European session, GBP/USD is trading at 1.2694, up 0.47%. UK inflation has a tendency to surprise the markets and that happened again on Wednesday as December CPI ticked upwards to 4.0% y/y, up from 3.9% in November and above the consensus estimate of 3.8%. The main driver of the upswing was higher alcohol and tobacco prices. Monthly, CPI rose 0.4%, up from -0.2% in November and higher than the consensus estimate of 0.2%.
Core CPI remained unchanged at 5.1% y/y, above the consensus estimate of 4.9%. Monthly, the core rate surged 0.6%, compared to -0.3% in November and above the consensus estimate of 0.4%. For the Bank of England, the rise in inflation is a nasty surprise, in particular the sharp rise in monthly core CPI. Still, one disappointing inflation report will not lead to the Bank of England changing its monetary policy. Read more...
GBP/USD outlook: Cable jumped around 0.4% in European trading on Wednesday
Cable jumped around 0.4% in European trading on Wednesday, lifted by above forecast UK December inflation data, which soured the sentiment about rate cut, pushing percentage of bets for rate cut by May significantly lower. Fresh gains move the price from dangerous zone after the price retested the floor of larger range at 1.2600 zone, which extends into fifth consecutive week.
Although the price action moved into range’s mid-point, there is still notable lack of clearer direction signals, as negative momentum on daily chart is strengthening, but moving averages are mixed and rising and thickening daily cloud continues to underpin. Read more...
Pound Sterling soars on surprisingly sticky UK Inflation data
The Pound Sterling (GBP) delivers a stalwart recovery on Wednesday after the release of the surprisingly stubborn United Kingdom consumer price inflation data for December. The GBP/USD pair recovers losses as hopes of an early rate cut by the Bank of England (BoE) have waned amid higher price pressures. The Consumer Price Index (CPI) came in higher than expected amid a significant rise in Oil prices and slightly higher service inflation.
Still-high inflation in the UK means that BoE policymakers have more room to maintain interest rates at the current 5.25% for a longer period. BoE policymakers have been warning that it is too early to discuss interest rate cuts as price pressures are far above the required rate of 2%. Read more...
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