Focus this morning was on UK inflation data which missed expectations and with cable teetering, an August rate hike priced at 50:50 and few clues given away at yesterday’s hearings, it makes this data release even more critical than usual. Given the slide we’ve seen in GBP/USD over the last few weeks, there’s an argument to say the risk is to the upside, but there’s still plenty of room for a further sell-off in GBP/USD as we stand.
In another news yesterday the UK Inflation Report Hearings came and went. We heard nothing much new, and it was a bit of a snooze fest if honest. Carney reiterated how the central bank would be monitoring data closely but failed to signal any likelihood of a rate hike in August, and although it shouldn’t have come as too much of a surprise, cable was sold. Later in the day US economic data printed better than expected and the GBP/USD sell-off was reaffirmed.