A big slide in inflation, in all figures: UK CPI fell to 1.6% y/y. The RPI slide to 2.5% and Core CPI to 1.8%. All numbers are below expectations. The HPI remained at double digits with 10.2%, but also below expectations. PPI Input fell by 1.6% month over month.
GBP/USD, that began sliding earlier, is now extending its fall and trading around 1.6640 — more coming —
Here is how the fall looks on the chart. Note that the move began earlier:
The headline consumer price index was predicted to slide to 1.8% in July after 1.9% in June. The Retail Price Index (RPI) carried expectations for a rise of 2.6% y/y. Core CPI was estimated to slide from 2% to 1.9%. The House Price Index (HPI) was expecte to remain on very high ground, rising from 10.5% to 11.2%.  Here is the preview: how to trade the UK CPI with GBP/USD.
Towards the release, GBP/USD fell back down and closed the weekend gap it opened following Carney’s weekend comments. The pair traded just under 1.67
Last week, Carney hit the pound hard with a relatively dovish inflation report. However, he said on the weekend that interest rates may rise before wages rise. The see-saw continues and this creates much needed volatility.
Support is found at the lows of 1.660 and resistance awaits at 1.6715. For more, see the GBP USD prediction.
