UK CPI figure drags GBP lower
Thursday 19 May, 2022
Daily Currency UpdateYesterday morning it was confirmed the UK inflation had reached its highest level since 1982, coming in at 9%. The news saw Sterling tumble from its attempts to break 1.2500 against the US dollar, initially to 1.3375 but as the session went on the pair touched lows of 1.2340. GBP/EUR saw a less significant fall, but dropped from 1.1850 pre-release to touching 1.1770 overnight.
UK economic data is light today, with no releases worth noting. GBP/USD will likely take direction from US data later this afternoon with Philadelphia FED manufacturing index, US unemployment claims and existing home sales, but until then continue to reel off the large CPI figure.
Key MoversEurope also released inflation data yesterday with final consumer prices index year-on-year. The annual inflation figure came in at 7.4%, stabilising after 9 consecutive increases which ended with April coming in at 7.5%. This offers the ECB some relief with other nations globally seeing continual gain with aggressive interest rate hikes planned to curb recessions. The ECB is expected to raise interest rates this year, three times before year end, to tackle the current inflationary concerns.
EUR/USD has fallen from gains earlier this week which took the currency pair to 1.0560, touching 1.0460 at the lows. However, talks of ending COVID lockdowns in China has softened safe haven interest in the US dollar and the currency pair has since made a break for 1.0500 once again this morning.
- GBP/USD: 1.2320 - 1.2460 ▲
- GBP/EUR: 1.1750 - 1.1860 ▲
- GBP/AUD: 1.7650 - 1.7820 ▲
- EUR/USD: 1.0440 - 1.0550 ▲