The Pound plunged. Overview for 20.08.2020

GBPUSD had to retreat under the influence of a strong “greenback” but it won’t be long. 

The British Pound was retreating against the USD yesterday but found support this morning. The current quote for the instrument is 1.3105.

It was clearly seen earlier that the Pound owned its optimism to the weak USD but not its own strength. Yesterday, when the “greenback” got some support from the FOMC and strengthened, other traded currencies, including the Pound, were forced to retreat. 

The statistics published by the United Kingdom were interesting and showed improvement in inflation. The Consumer Price Index was 1.0% y/y in July after being 0.6% y/y in the previous month, although it wasn’t expected to change. The Core CPI showed 1.8% y/y after being 1.4% y/y in June.

The RPI was 1.6% y/y in July after showing 1.1% y/y the month before. The PPI Output remained unchanged at 0.3% m/m although it was expected to fall a little bit. The PPI Input showed 1.8% m/m after being 3.0% m/m before, which means that consumable materials bought by manufacturers for production got more expensive. In some way, it’s a leading indicator of inflation, which means that prices will even themselves. The neutral stance of the Bank of England, which implies watching instead of acting pre-emptively, justified itself once again. 

Today, the United Kingdom is going to report on the CBI Industrial Order Expectations for August, which is anticipated to improve a bit. But the most interesting is scheduled for tomorrow – the Retail Sales in July, which may add 2.0% m/m after skyrocketing by 13.9% m/m the month before.