- GBP/USD turns negative after UK inflation data misses expectations.
- Brexit sterling effect begins to fall out of inflation calculations
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UK inflation fell in June from May, easing the pressure on Bank of England governor Mark Carney to raise rates. CPI y/y fell to 2.6% in June from 2.9%, while CPIH – the reading including occupiers housing costs – fell to 2.6% from 2.7%, the first fall in the CPIH inflation rate since April 2016, although it remains higher than in recent years, according to the Office for National Statistics (ONS).
GBPUSD earlier traded as high as 1.31260, the highest level since September 2016, but fell before and after the release as the pressure on the Bank of England to tighten monetary policy fades. GBPUSD started to turn lower around 30 minute before the official ONS release.
Chart: GBPUSD 10-Minute Timeframe (July 18 2017)
And today’s UK inflation numbers were just one of four potentially market moving areas identified that could impact UK asset markets this week, that were discussed in the latest ‘Key UK Events and Markets for the Week Ahead’ webinar last Friday. If you would like to listen to the 25 minute webinar, please sign up for free and immediate access.
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--- Written by Nick Cawley, Analyst
To contact Nick, email him at firstname.lastname@example.org
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