The GBP/USD pair sellers took a break; the market isn’t paying enough attention to the statistics.
On the second week of June, the British Pound found support and stopped falling. The current quote for the GBP/USD pair is 1.2716. The local bottom is at 1.2634.
The statistics published today indicated that the CPI in the United Kingdom added 2.9% y/y in May against the expected reading of 2.7% y/y. The Core Inflation Rate in the same month expanded by 2.6% y/y, which is much better than expectations of 2.3% y/y.
The PPI Input decreased by 1.3% m/m in May (worse than expected), the PPI Output added 0.1% m/m, which is also worse than any predictions. It appears that the inflation in May accelerated and changes in the PPI Output are also positive. The current reading of the CPI is the best over four years.
Strange as it may seem, but the Pound was pretty happy about the inflation growth and moved to the upside against the USD, although the inflation target of the Bank of England is similar to other major regulators, 2%, and it will be as difficult to fight the high inflation as the low one. it’s very important in the long-term, but right now this statistic attracts little attention.
The Brexit, early parliamentary elections, and the failure of the Conservative party remain a general focus of attention. All these events contain a lot of risks, that’s why investors are following news pretty closely.
RoboForex Analytical Department