Jump to content

Drawdown in sterling for both GBP/USD and GBP/EUR as UK CPI reaches 10.1% YoY


Recommended Posts

A rise in food prices has been mostly responsible for the climb in consumer price inflation. Food and non-alcoholic price rises are at 14.6%, levels not seen in 40 years. Both GBP/USD and GBP/EUR have seen a drawdown in sterling.

 Jeremy Naylor | Writer, London | Publication date: Wednesday 19 October 2022

Inflation at four decade highs

Inflation has risen to its fastest rate in 40 years, with a rise from 9.9 to 10.1% of the consumer price headline rate.

Let's take a look at the figures as we continue to monitor the fallout from the data that we've seen. It's not just consumer prices but also producer prices and retail prices that have risen.

But, it's the headline 10.1% reading in September that takes us back to where we were in July after that slightly lower print in August, but we have been expecting a 10% number. So this is stronger than had been expected, adding to extra expectation that we could well see the Bank of England (BoE) give us a bumper interest rate rise on the 3rd of November.

Food and the non-alcoholic drink have risen by 14.6% in the 12 months through to September, up from 13.1% in the month of August. And it means that prices as I said are rising at this 40-year rate now. The inflation numbers are being driven by food prices mainly.

GBP/USD

If we look at what's been happening on the foreign exchange markets, in fact there's been a second day of declines for sterling.

This is the the daily candle chart showing us a pullback on from yesterday's drawdown. We saw just a slight reversal of what we saw was overall a positive day on the markets for sterling on Monday.

We've seen Jeremy Hunt now come through as the new Chancellor Exchequer, giving some extra hope for sterling off the lows that we saw when we saw that low print back at the lowest point we ever seen since decimalisation back in the early 70's. That was on the 26th of September. Since then, sterling has strengthened.

GBP/EUR

It also strengthened as well against the euro. But in today's session, its down for a fourth day in a row.

But we see it well off the lows that we've seen over the last couple of weeks or so for sterling. But the news out of this today is that we should expect to see further interest rate rises when the Bank of England meets at the beginning of November.

Link to comment

GBP/USD Dips as UK Inflation Rises Beyond 10%

Oct 19, 2022 | DailyFX
Zain Vawda, Analyst

UK CPI Key Points:

  • UK CPI Rose 10.1% Annually, up from 9.9% in August.
  • The Largest Contribution to the Increase was from Food Prices (14.8% vs 13.4% in August), Namely Oils, Fats and Dairy Products.
  • The Annual Core Rate Rose to a Record-High of 6.5% Vs 6.4% Expected.

British Pound Outlook: GBP/USD Soars as Truss Hastens Efforts to Regain  Credibility

UK inflation accelerated in September beating estimates and matching the 40-year high set in July. The core rate of inflation came in at a record high of 6.5% while consumer prices rose 0.5% on a month-to-month basis. This renewed increase in inflation following last months respite highlights the challenges facing the UK economy and the Bank of England heading into the winter months.

Graphical user interface, text, application, email  Description automatically generated

Customize and filter live economic data via our DailyFX economic calendar

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Dopamine emerges as a beacon of innovation in the world of cryptocurrency management, offering a non-custodial, secure, and anonymous mobile app wallet. With over two million downloads and a robust user base, Dopamine is reshaping the landscape of decentralized finance (DeFi) on both Android and iOS platforms. Let's delve into the features and functionalities that make Dopamine a must-have tool for navigating the cryptocurrency market. Key Features: 1. Comprehensive Portfolio Tracking: Dopamine's native token, $DOPE, empowers users to monitor their favorite projects from a vast collection of over 10,000 coins, ensuring informed decision-making in the dynamic crypto market. 2. Enhanced Security Measures: With built-in Anti-Money Laundering services, Dopamine enables users to safeguard their assets by identifying potential fraud and assessing risk scores associated with their wallets. 3. Real-Time Market Insights: Stay ahead of the curve with Dopamine's ability to track market trends and identify coins making significant moves, ensuring users remain informed and proactive in their investment strategies. 4. Cross-Chain NFT Transactions: Seamlessly send and receive NFTs across various blockchains, including Ethereum, BSC, Fusion, and more, providing users with unparalleled flexibility and interoperability. 5. Efficient Information Management: Dopamine simplifies data management by allowing users to save essential information and access it instantly, streamlining their crypto journey with convenience and ease. 6. Convenient Fiat On-Ramp: Facilitating seamless transactions, Dopamine enables users to buy crypto directly from their credit or debit card within the app, eliminating the need for multiple platforms and intermediaries. 7. DeFi Gaming Integration: Dive into the exciting world of decentralized finance gaming with Dopamine, offering users access to a diverse range of DeFi games directly from the app, adding a touch of entertainment to their crypto experience. With its innovative features, commitment to user empowerment and upcoming listing on Bitget exchange, Dopamine stands as a revolutionary platform that caters to the diverse needs of cryptocurrency enthusiasts. As the cryptocurrency market continues to evolve, It remains at the forefront, providing users with a secure, versatile, and intuitive solution for managing their digital assets and exploring new horizons in decentralized finance.
    • Name of stock: Adventus Mining Name of Stock Exchange: TSX Leverage or Share dealing: Share dealing Ticker: ADZN Country of stock: Canada
×
×
  • Create New...
us