-Â U.K. Consumer Price Index (CPI) to Rebound in July.
–Â Core Rate of Inflation to Expand Annualized 2.5%- Second Highest Reading for 2017.Â
Trading the News:Â U.K. Consumer Price Index (CPI)
A pickup in both the headline and core U.K. Consumer Price Index (CPI) may foster a near-term rebound in GBP/USD as it puts pressure on the Bank of England (BoE) to normalize monetary policy sooner rather than later.
In response, a growing number of BoE officials may change their stance at the next meeting on September 14 as ‘the withdrawal of part of the stimulus that the Committee had injected in August last year would help to moderate the inflation overshoot while leaving monetary policy very supportive.’ However, another dismal development may continue to generate a 7 to 2 split as Sir David Ramsden joins the Monetary Policy Committee (MPC), and the British Pound may face a more bearish fate over the near-term as the majority remains in no rush to raise the benchmark interest rate off of the record-low.
Impact that the U.K. CPI report has had on GBP/USD during the previous release
|
Period |
Data Released |
Estimate |
Actual |
Pips Change (1 Hour post event ) |
Pips Change (End of Day post event) |
|
JUN 2017 |
07/18/2017 08:30:00 GMT |
2.9% |
2.6% |
-37 |
-32 |
June 2017 U.K. Consumer Price Index (CPI)
GBP/USD 5-Minute Chart
The U.K. Consumer Price Index (CPI) unexpectedly narrowed to an annualized 2.6% in June, with the core rate of inflation highlighting a similar behavior, with the reading slipping to 2.4% per annum from 2.6% in May. A deeper look at the report showed the weakness was led by a 1.0% decline in prices for clothing & footwear, with the cost for food & non-alcoholic beverages narrowing 0.2% in June, while household costs held flat during the same period after rising 0.6% in May. The British Pound lost ground following the series of dismal prints, with GBP/USD pushing below the 1.13050 region to end the day at 1.3039.
