The Great British Pound underwent a session of price discovery in overnight trading as the Bulls attempted to gain the momentum ahead of a special inflation report by the Bank of England. Moving to a high of 1.3491, the Sterling however quickly unwound those gains to ultimately open this morning at 1.3433.
Traders found little support during the parliamentary session on Inflation as the Bank of England dampened any hope of an August Interest rate hike. Governor Carney commentated that he is conscious that there are other meetings at which the committee could act this year, refusing to confirm or deny an August rate hike. Carney also acknowledged the softer numbers recently, alluding to the drop in retail sales, softer inflation figures and mixed labour-market figures but pledged to look at the economy “in the round”. Investors primarily interpreted the report as dovish, sending the Cable south from its pre-report daily high.
The Cable now sets its eyes on the year on year inflation reading due for release today.