Yesterday’s US consumer price index reading printed above expectation, providing the US dollar with a reason to continue its rally. Even though the number was below last month’s 8.5% reading, it was still above the consensus for April which has maintained speculation that inflation will remain persistently high for longer. The greenback continued to surge against many of its counterparts, pushing to the $1.22 against the pound and pushing the euro back down to $1.05.
The pound’s losses outpaced those of the euro which in turn pushed the GBPEUR pair back down to multi-month lows. The pound has shed almost 9 cents against the US dollar in just under 3 weeks. The outlook remains gloomy, and the Bank of England continues to promote the idea of an economy which will struggle for the remainder of this year and beyond. Economic data will not play a key role in sterling’s progression. Good data could begin to alleviate its recent weakness while weaker numbers will only add fuel to the fire.
Written by Viv Savani. 8:27am, May 12th 2022
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