GBP Dips on Softer Inflation, Focus on EU Summit
GBP Analysis and Talking Points
- GBP Falls on Softer Inflation
- Focus on Brexit Ahead of EU Summit
See our Q4 GBP forecast to learn what will drive the currency through the quarter.
GBP Falls on Softer Inflation
GBP fell to intra-day lows following the latest inflation report, whereby both the headline and core readings underwhelmed expectations. The headline yearly rate dropped to 2.4% from 2.7% as effects of Sterling depreciation continue to fade. Given that yesterday’s jobs report showed wages rising to the highest level since January 2009, there is some good news in that the drop-in inflation helps relieve the squeeze on household incomes.
Focus on Brexit Ahead of EU Summit
UK data has largely been a secondary driver for the Pound with the headlines and price action focusing on Brexit. Today will see the beginning of the 2-day EU summit with market participants placing a close eye on whether there is notable progress in Brexit. In regard to the latest reports, the EU is said to be open to extending Brexit transition by another year if PM May accepts a “two-tier” backstop to avert a border in Northern Ireland, however, this was later rejected, according to government sources.
EU Summit Agenda (Times in CET)
GBPUSD CHART: 1-Minute Time-Frame (Intra-day)
--- Written by Justin McQueen, Market Analyst
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