The UK Producer Price Index is set to show that the annual pace of wholesale inflation rose to 1.9% in Ocotber, the highest since March. While the metric is likely to hint at higher consumer prices in the months ahead, traders are unlikely to read too much into the outcome after the Bank of England predicted yesterday that while inflation is likely to rise “sharply” in the near term, boosted (among other things) by the weaker currency, the long-term outlook points to weakness as ample spare capacity weighs down on prices. To that effect, higher results across headline inflation gauges may not do much to encourage investors’ rate hike expectations and thereby offer little support to the British Pound.
For streaming currency market news and analysis, please visit http://forexstream.dailyfx.com
To reach Ilya regarding this article or subscribe to his email distribution list, please contact him at ispivak@dailyfx.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
