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Pound US Dollar at One-Year High as UK Inflation Surges

Categories: AUD, CAD, EUR, GBP, Markets, News, NZD, USD
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Sterling



GBP/USD 1 Week Chart

The Pound (GBP) strengthened against the majority of its peers yesterday as the UK latest CPI figures came in higher than expected.

According to data released by the ONS, inflation in August jumped from 2.6% to 2.9%, outpacing forecasts it would only hit 2.8% and matching the four-year high struck in May.

Meanwhile, the release of the UK’s employment data later this morning may send Sterling even higher, especially if wage growth rises as expected.

Euro

The Pound Euro (GBP EUR) exchange rate rose by around half a cent on Tuesday as markets were impressed by the UK’s inflation figures.

Investors are hopeful that the surge in inflation will place more pressure on the Bank of England (BoE) to begin tightening monetary policy, and possibly lead to the bank raising interest rates in the near future.

Meanwhile, the Eurozone will release its latest industrial production figures later today, with the single currency likely to rally if output rises in July as expected.

US Dollar

The upbeat reaction to the UK’s inflation data propelled Sterling to a new one-year high against the US Dollar (USD) this morning as markets hope it persuade the BoE to hike rates sooner rather than later.

Meanwhile, not even a surprise rise in JOLT’s Job Opening figures were enough to aid the ‘Greenback’ yesterday, especially as some doubts over the short term impact of Hurricane Irma also linger.

However, an uptick in the US PPI data later this afternoon could see the US Dollar mount a recovery, as economists forecast that the core index will rise from -0.1% to 0.2% in August.

Canadian Dollar

The Pound Canadian Dollar (GBP CAD) exchange rate lept by over a cent on Tuesday as even another lift in oil prices was not enough to help the ‘Loonie’ repel Sterling’s advance following the UK’s CPI data.

Australian Dollar

After rising to a new one-month high against the Australian Dollar (AUD) on Tuesday, Sterling found its advance slowed during the Asian session as Westpac reported that its Australian Consumer Confidence Index jumped from 95.5 to 97.9, its highest level since May.

New Zealand Dollar

While the Pound New Zealand Dollar (GBP NZD) exchange rate was able to push higher yesterday, its advance was slowed slightly as markets reacted favourably to the latest polling data from New Zealand that suggests that the ruling National Party is just ahead in the general election.

TorFX Author: TorFX

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