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...
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD continues to grind out further losses
EUR/USD continued to drift into the basement on Wednesday, clipping into a 54-week low and settling within touch range of 1.0550. Fiber continues to shed weight on the charts as broader FX markets pivot full-bore into holding the Greenback.
GBP/USD sheds weight for a fourth straight day on Wednesday
GBP/USD eased further into the low end on Wednesday, trimming further south of the 200-day Exponential Moving Average in a one-sided bearish decline as the pair closes in the red for a fourth consecutive trading day.
Gold extends slide to fresh two-month low
After shedding some ground throughout the first half of the day, the US Dollar is back in fashion. XAU/USD trades at its lowest in two months in the $2,580 region and is technically poised to extend its slump.
Australia unemployment rate expected to remain steady for third straight month in October
The Australian Unemployment Rate is foreseen stable at 4.1% in October. Employment Change is expected at 25K, much lower than the 51.6K posted in September. AUD/USD is under pressure and may soon pierce the 0.6500 mark.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.