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.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bullish
USD/JPY
Bearish
Gold
Bearish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bullish
More View more
Real Time News
  • - Copper price outlook gloomy as #COVID-19 intimidates Chinese demand - Coronavirus threatens to derail global stabilization, pressure commodity - Copper futures have plunged over 10 percent, falling to 17-year uptrend https://www.dailyfx.com/forex/market_alert/2020/02/26/Copper-Outlook-Bleak-as-COVID-19-Threatens-China-Economy.html
  • The $JPY has lost out to a broadly resurgent US Dollar, with a clearly dwindling band of Yen bulls left to hope that the most recent rise has become overextended. Get your market update from @DavidCottleFX here:https://t.co/7Ndm5jiOi7 https://t.co/iXFakOQKJB
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.90% Silver: 0.38% Gold: 0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/CwYU17wruT
  • RT @DavidInglesTV: U.S. weekly imports from China fell by half last week and early indications is this week will be about half of last week…
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.02% 🇦🇺AUD: -0.01% 🇳🇿NZD: -0.06% 🇪🇺EUR: -0.12% 🇨🇭CHF: -0.13% 🇯🇵JPY: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/V5JsKlfFcF
  • Hong Kong 2020 GDP forecast -1.5% to +0.5% -BBG
  • Hong Kong 2019 GDP contracts 1.2% y/y versus -1.2% prior -BBG
  • Hong Kong Financial Secretary Paul Chan: H.K. plans HK$120b counter-cyclical measures, to have record budget deficit in next fiscal year. May face worse economic fallout than SARS -BBG #coronavirus
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.72%, while traders in USD/CAD are at opposite extremes with 70.87%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/MPjzddWn0d
  • The $USD may rise against the Norwegian #Krone and Swedish #Krona in the week ahead as panic about the #coronavirus inflames demand for anti-risk FX at the expense of cycle-sensitive assets. Get your market update from @ZabelinDimitri here:https://t.co/9Dqik1eTU2 https://t.co/PWRjZ9l00c
GBPUSD Hits A Five-Month Low on UK Inflation Miss

GBPUSD Hits A Five-Month Low on UK Inflation Miss

2018-05-23 09:00:00
Nick Cawley, Analyst
Share:

- Lower consumer prices push back potential UK rate hikes.

- GBP hits a five-month low against the USD: next up the FOMC.

The IG Client Sentiment Report shows that traders are just over 70% long GBPUSD – a bearish contrarian signal - although current changes give us a mixed trading bias.

GBP Continues to Fall with Interest Rate Hikes Being Kicked Down the Road.

UK inflation continues to move lower, with annual CPI falling to 2.4% in April against a prior months, and expectations of, 2.5%. The Bank of England’s preferred choice of inflation, CPIH fell to 2.2% from 2.3% in March. Inflation fell despite the recent surge in the oil price.

Commenting on today's inflation figures, ONS Head of Inflation Mike Hardie said:“Inflation continued to slow in April, with air fares making the biggest downward contribution, due to the timing of Easter. This was partially offset by the rise in petrol prices. He added, “annual price growth for goods leaving factories was unchanged in April. However, the cost of raw materials increased, mainly driven by strong rises in crude oil prices.

The slight fall in UK consumer prices will buoy the doves on the Bank of England’s MPC and keep interest rates lower-for-longer. While some analysts are looking at the August MPC meeting for a 0.25% rate hike, any further falls in inflation will push these expectations back to November. UK growth, currently at a quarterly rate of 0.1% will also need to pick up strongly before the hawks in the BOE take control.

On the chart, 1.33018 is the first downside target ahead of a heavier fall to 1.30272, the October 6 swing low. Moves to the upside will be met with resistance at 1.34581, the January 11 low print. It is worth noting the GBPUSD continues to sit in oversold territory according to the RSI indicator at the bottom of the chart.

This evenings's FOMC meeting will draw greater attention for GBPUSD investors as well with the US dollar continue to move higher.

GBPUSD Daily Price Chart (April 20, 2017 – May 23, 2018)

GBPUSD Hits A Five-Month Low on UK Inflation Miss

Looking ahead, UK retail sales data on Thursday and the second look at UK Q1 GDP will also help shape sterling moves, while also early Thursday BOE governor Mark Carney and New York Fed president William Dudley will speak at the BOE Markets Forum in London.

DailyFX Economic Calendar.

GBPUSD Hits A Five-Month Low on UK Inflation Miss

Traders may also be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts may be interested in our latest Elliott Wave Guide.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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

DISCLOSURES

News & Analysis at your fingertips.