Pound Spikes Up As U.K. Inflation Soars To 40-year High
17 August 2022 - 06:23AM
RTTF2
The pound strengthened against its most major counterparts in
the European session on Wednesday, as the nation's consumer
inflation accelerated in July, raising expectations for a 50
basis-point rate hike by the Bank of England at the meeting in
September.
Data from the Office for National Statistics showed that the UK
consumer price index climbed to 10.1 percent on year in July, from
9.4 percent in June. Inflation was forecast to rise to 9.8
percent.
On a monthly basis, inflation eased to 0.6 percent in July from
0.8 percent in June. Economists had forecast inflation to slow to
0.4 percent.
Core inflation, which strips out volatile energy, food,
alcoholic beverages and tobacco prices, eased to 6.2 percent from
5.8 percent.
Markets expect the BoE to raise its key rate by 50 basis points
to 2.25 percent from 1.75 percent in September.
The GBP/JPY pair touched a 1-week high of 163.07. Next key
resistance for the currency is seen around the 166.00 area.
The pound added 0.3 percent against the franc, hitting a 1-week
high of 1.1527. The currency is likely to find resistance around
the 1.18 level.
The pound advanced 0.1 percent to 0.8399 against the euro, its
highest level since August 4. The currency is seen finding
resistance around the 0.82 level.
The pound appreciated to a 2-day high of 1.2142 against the
dollar around 2 am ET, but it has since eased to 1.2081. The pair
had closed Tuesday's deals at 1.2093.
Looking ahead, Eurozone GDP and employment data for the second
quarter are set for release in the European session.
U.S. retail sales for July and business inventories for June
will be featured in the New York session.
At 2:00 pm ET, the Fed releases the minutes from July 26-27
meeting.
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