Prior to the release of YK retail prices, housing and inflation data by the UK Office of National Statistics, the Pound Sterling had been trading close to a 3-year trough. Though the data was mixed, generally, with retail prices coming in as expected, and the house price index missing the forecasts, the across-the-board upbeat inflation data helped to shift market sentiment and sent the Pound higher against both the US Dollar and the Euro. The market moving CPI for July came in at 2.1% on an annualized basis, above the 1.9% expected. Core CPI also rose, to 1.9% against a predicted 1.8% for July.
As reported at 11:00 am (GMT) in London, the GBP/USD was trading higher at $1.2082, a gain of 0.1874%; the pair moved well off the session trough of $1.2045 while the high of $1.2086 came after the news. The EUR/GBP was trading at 0.9252 Pence, down 0.1026%; the pair ranged from a low of 0.92509 Pence to a high of 0.92760 Pence in this session.
BoE Policy Stance Likely Unchanged
As most economists had expected to see only a slight move higher in inflation data, it remains to be seen how the bank of England’s Monetary Policy Committee will react to to the data at its next policy meeting. Currency strategists still believe that data will take a back seat to concerns over the impending Brexit.