Yesterday’s UK inflation numbers were brushed off by the pound as traders and dealers focused on the negative implications for consumers rather than the impact on the Bank of England. The consumer price index rose to 9% in April following March’s 7% reading.
The initial reaction saw the pound sell-off as participants interpreted the data as a significant negative for the UK economy. Even though the release came in lower than forecast, it’s become apparent that investors believe peak inflation may not have been reached in the UK.
By the New York close, sterling was back in the $1.23 handle against the US dollar and in the €1.17 versus the shared currency. Today’s trading session will see the focus on the latest set of meeting minutes from the European Central Bank’s recent monetary policy meeting.
Written by Viv Savani. 6:48am, May 19th 2022
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