GBPUSD has found support and right now is trying to recover based on the inflation report.
The British Pound is growing against the USD on Tuesday. The current quote for the instrument is 1.3902.
In the afternoon, the United Kingdom published several macroeconomic reports. First of all, investors paid attention to the Consumer Price Index in January. The indicator was 3%, the same as in December last year, although it was expected to decrease up to 2.9%. The Core Inflation Rate increased from 2.5% in December to 2.7% this month. The expected reading was 2.6%.
Such strong statistics on the inflation immediately sparked market expectations relating to the benchmark rate increase by the Bank of England in order to make the CPI more stable. At the moment, about 70% of investors are expecting the rate to be revised upwards by 25 basis points in May 2018. By the way, the British regulator is mum on that.
As for the regulator’s estimations on the inflation, the BoE emphasized on several occasions that the inflation might increase up to 3% before going down. Such scenario shouldn’t be excluded as well.
Other January reports published this morning showed that the PPI Input added 0.7% m/m (more than in December) and the PPI Output increased by only 0.1% m/m (+0.4% m/m the month before).
RoboForex Analytical Department
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
Need any help? Click on the icon in the lower right corner of the page and get an answer to any your questions