News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • The Bitcoin plunge turned off near-term downtrend support and while we could see more recovery in the short-run, the risk remains lower while within this formation. Get your $btc market update from @MBForex here:https://t.co/Vf94gjIqhx https://t.co/nqhU8Ve5mx
  • The Central Bank of the Republic of Turkey ended its monetary tightening cycle will a surprise 100-bps rate cut on Thursday. Get your market update from @CVecchioFX here:https://t.co/zbhiBmUKiO https://t.co/AYxFnqB7ou
  • Risk on sentiment has buoyed AUD/USD, with the cross trading back above 0.7300 $AUDUSD https://t.co/Bx5MOuIgDb
  • The morning after the Fed has produced some robust moves in markets, with both stocks and bonds putting in a notable leap. Get your market update from @JStanleyFX here:https://t.co/7sQ4d63PLM https://t.co/vfrKuhDUce
  • Gold trades back down to $1,750 as US real yields tick higher $XAUUSD #Gold https://t.co/yMtnYCBsaa
  • Canadian Dollar Price Forecast: USD/CAD Snaps Back to Key Support https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/09/23/Canadian-Dollar-Price-Forecast-USD-CAD-USDCAD-Snaps-Back-to-Key-Support-Zone.html $USDCAD https://t.co/BGiAkAI3zy
  • RT @BrendanFaganFx: 77 counterparties take $1.352 trillion at Fed's fixed-rate reverse repo $USD $DXY https://t.co/kjecsXvpVU
  • EUR/USD attempts to halt a five day decline as the Federal Reserve sticks to the sidelines. Get your market update from @DavidJSong here:https://t.co/ig9bGLj35i https://t.co/YPksmNdJLR
  • US Markit Composite PMI for September fell to 54.5 from 55.4, whereby the services and manufacturing figures fell to 54.4 and 60.5 respectively, both missing analyst estimates. Get your market update from @JMcQueenFX here:https://t.co/4lFZGRufsM https://t.co/DuPcQtaBz0
  • S&P 500, Nasdaq Rally After the Fed; 10 Year Yield to Two-Month-Highs https://www.dailyfx.com/forex/market_alert/2021/09/23/SPX-SPY-ES-SP500-Nasdaq-NQ-QQQ-Rally-After-the-Fed-10-Year-Yield-2-Month-High.html https://t.co/peftVleO0y
UK Inflation Adds to Legitimacy of BoE Monetary Guidance

UK Inflation Adds to Legitimacy of BoE Monetary Guidance

Benjamin Spier, Technical Strategist

THE TAKEAWAY: UK inflation declines to 2.8% in July, as expected -> BoE policy depends on inflation below 2.5% -> GBP/USD erases earlier losses

Want to trade with proprietary strategies developed by FXCM? Find out how here.

UK annual inflation fell back slightly from a yearly high, thereby signaling that the BoE’s expectation for inflation to fall below 2.5% over the next two years is a realistic one.

UK consumer prices were reported to have risen 2.8% over the 12-month period ending in July, which both met expectations and declined from the 2.9% annual inflation rate in June. Consumer prices were unchanged on a monthly basis, according to the UK Office for National Statistics.

Input costs for UK producers rose 5.0% on an annual basis, the biggest annual rise in over a year, according to a different report. Meanwhile, the retail price index was unchanged on a monthly basis in July.

Inflation now has a more defined role in Bank of England monetary policy, according to the inflation report released last week. The report said that interest rates will only rise after unemployment falls back to 7%. However, the reliance on unemployment would be ‘knocked out’ if inflation fails to fall within 0.5% of the BoE’s 2% target inflation year within the next two years. Although the BoE expects inflation to fall back towards 2% within 2 years, a rise in Pound following the report release attested to traders’ skepticism.

Therefore, a bigger than expected decline in inflation would have been Pound negative. The Pound erased earlier losses against the US Dollar following the as-expected release. Resistance may now come in at 1.5518, by a rising trend line from early July, and support may be seen by a broken resistance line around 1.542.

New to Forex? Watch this video

GBPUSD Daily: August 13, 2013

UK_Inflation_Adds_Legitimacy_to_BoE_Monetary_Guidance_body_gbpusd.png, UK Inflation Adds to Legitimacy of BoE Monetary Guidance

Chart created by Benjamin Spier using Marketscope 2.0

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES