- The pound of sterling rises against the main peers when the inflation of Great Britain grew faster than the expected pace in June.
- Investors focus on the labor market in the UK for three months ended in May.
- The CPI report in the US showed that Trump’s tariffs began to feed on consumer prices.
The Sterling (GBP) pound attracts offers against the main peers on Wednesday after the consumer consumer index (CPI) data projects in June.
Office for National Statistics (ONS) announced that the inflation header increased to 3.6% a year, the highest level observed since January 2024. Economists expected that inflationary data would constantly escalate by 3.4%. The basic CPI – which excludes unstable items, such as food, energy alcohol and tobacco – increased by 3.7%, faster pace than expectations and earlier reading 3.5%. In the month, the main CPI increased by 0.3%, which was also faster than expectations and previous 0.2%readings.
Meanwhile, inflation in the service sector, an indicator that is strictly followed by Bank of England officials (Boe), increased constantly by 4.7%.
Signs of acceleration of price pressure should encourage Boe to argue to maintain a restrictive attitude of monetary policy. However, the British Central Bank may need to perform a exquisite balance act, discussing interest rates at the August monetary policy meeting in connection with the escalation of price pressure and conditions on the labor market.
It is expected that the markets in Great Britain are expected to force the markets to re -supplement the boots supporting plants by Boe in the rest of the year. Before UK CPI Data, traders were more and more convinced that the central bank would reduce interest rates at the policy meeting next month.
In the case of fresh tips on the state of the British labor market, investors are waiting for work on work in May, which will be issued on Thursday.
The escalate in the contribution of employers to social insurance programs by the treasury chancellor Rachel Reeves led to a slowdown in employment. The latest surveys conducted by the recruitment and employment and accounting authority of KPMG signaled that the availability of people to work has increased significantly.
The price of the British pound today
The table below shows a percentage change in the British pound (GBP) in relation to the main currencies. The British pound was the strongest in relation to the dollar of New Zealand.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.08% | -0.11% | -0.09% | 0.02% | -0.07% | 0.17% | 0.09% | |
| EUR | 0.08% | -0.02% | -0.03% | 0.10% | -0.04% | 0.20% | 0.18% | |
| GBP | 0.11% | 0.02% | 0.00% | 0.14% | 0.01% | 0.22% | 0.20% | |
| JPy | 0.09% | 0.03% | 0.00% | 0.10% | 0.07% | 0.23% | 0.22% | |
| BOOR | -0.02% | -0.10% | -0.14% | -0.10% | -0.10% | 0.04% | 0.06% | |
| Aud | 0.07% | 0.04% | -0.01% | -0.07% | 0.10% | 0.21% | 0.20% | |
| NZD | -0.17% | -0.20% | -0.22% | -0.23% | -0.04% | -0.21% | -0.02% | |
| CHF | -0.09% | -0.18% | -0.20% | -0.22% | -0.06% | -0.20% | 0.02% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose a British pound on the left column and move along the horizontal line to the American dollar, the percentage shift displayed in the field will represent GBP (base)/USD (quote).
Daily Digest Market Movers: pound sterling edge higher in relation to the American dollar
- The Sterling pound (GBP) throws eight days of losing in relation to the American dollar (USD) and collection to almost 1.3400 during the European Trade Session after the Hot UK CPI report was issued. The transfer of revival in Parie GBP/USD took place despite the definite American dollar excited that the tariff policy announced by the President of the United States (USA) Donald Trump began to feed on prices.
- The CPI report in the US showed on Tuesday that producers began to convey the influence of Trump tariffs on consumers. According to the product category prices report, such as household equipment, recreation and clothing, which led to the main CPI to accelerate to 2.7% a year, as expected, faster than the previous 2.4% reading.
- Market experts have warned that price pressure may escalate, because the impact of tariffs, which will be effective on August 1, should still be provided by the economy. Such a scenario may allow the Federal Reserve (FED) to require more time to transparency on the overall inflation of inflation based on the tariff before any monetary policy adaptations. “If the recent tariffs threatened on August 1, it enters into force, then an additional increase in inflation in the prices of goods and maintenance of power on the side line, unless the work market is suddenly transformed into worse,” said analysts from Oxford Economics.
- Signs of price pressure accelerating in the near future forced traders to establish FED plants. According to the CME Fedwatch tool, the probability that the FED will reduce interest rates in the September meeting dropped to 55.5% from 64.7% evident a week ago. At the political meeting at the end of this month, the markets are almost fully valued, because the FED will leave interest rates in the range of 4.25%-4.50%.
- President Trump imposed additional fees to 22 nations, especially Japan, South Korea, the European Union (EU) and peers from North America for the lack of a commercial agreement during a 90-day break in the tariff. Meanwhile, Washington closed contracts with Great Britain (Great Britain), Vietnam, Indonesia and a confined pact with China. Trump expressed trust on Tuesday that soon there is close to the conclusion of commercial contracts with five or six countries from which India can be.
Technical analysis: The pound sterling is aimed at returning above 1,3400
The pound of sterling reflects back to 1.3400 compared to the American dollar on Wednesday after re -transferring over seven -weekly lowest levels around 1.3370 the previous day. Short -term trend pair GBP/USD He became Bearish because it trades below 20-day and 50-day interpretation medium-sized (EMA) at approximately 1.3540 and 1.3470, respectively.
The 14-day relative strength indicator (RSI) drops below 40.00. A fresh minor rush would appear if RSI remained below the same.
Looking down, the lowest level of May 12 of 1.3140 will act as a key support zone. On the other hand, the highest level of July 11 around 1.3585 will act as a key barrier.
Frequently asked inflation questions
Inflation measures the escalate in the price of a representative basket of goods and services. Header inflation is usually expressed as a percentage change based on month to month (Mom) and year on year (Yoy). Basic inflation excludes more unstable elements such as food and fuel, which can change because of geopolitical and seasonal factors. Basic inflation is the number of economists focus on the level of central banks, which are authorized to maintain inflation at a management level, usually about 2%.
The consumer price indicator (CPI) measures the change in the prices of the basket of goods and services over time. This is usually expressed as a percentage change on the basis of month to month (Mom) and year on year (Yoy). Core CPI is a number directed by central banks because it excludes unstable food and fuel cartridges. When Core CPI increases above 2%, it usually causes higher interest rates and vice versa when it drops below 2%. Because higher interest rates are positive for currency, higher inflation usually causes a stronger currency. On the contrary, it is true when inflation falls.
Although this may seem contrary to intuition, high inflation in the country increases the value of its currency and vice versa for lower inflation. This is due to the fact that the central bank usually raises interest rates to combat higher inflation, which attracts more global influx of capital than investors looking for a lucrative place to park their money.
Earlier, gold was investors of assets, to which he turned to high inflation, because it retained its value, and although investors often buy gold for his safe and sound real estate in times of extreme market riots, this is not the most of the time. This is because when inflation is high, central banks set interest rates to combat it. Higher interest rates are negative in the case of gold because they escalate the costs of having gold in relation to assets on interest or place money on the cash deposit account. On the other hand, lower inflation is positive for gold because it lowers interest rates, thanks to which vivid metal is a more profitable investment alternative.
