Pound Falls on Little Surprise in the UK Inflation Release
- Monthly change in UK consumer prices slightly less than expected
- Inflation shifts into focus following recent Carney comments
- Pound declines towards 1.5900
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The Pound slid about 30 pips against the US Dollar, as the annual inflation rate fell for the second straight month, after setting a 16-month high in June. The consumer price index rose 2.7% from August 2012, meeting expectations for a 0.1% decline from July’s inflation rate. On a monthly basis, the CPI increased by 0.4%, slightly disappointing expectations.
Inflation has shifted into focus for Pound traders after Carney told UK lawmakers last week that the Bank of England has not dropped its 2% inflation target. In August, the central bank said that it will not raise rates until employment falls to 7%. However, if inflation remains above 2.5% for longer than a 2-year period, then the unemployment clause for a rate increase is “knocked out”.
The Cable pair declined towards 1.5900 in Forex markets on the lower than expected monthly price change. The pair may continue to see resistance at 1.5930, by the opening level yesterday following the weekend gap. Support may be provided by a former high near 1.5750.
GBPUSD Daily: September 17, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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