The inflation rate in the United Kingdom eased to 9.9% from 10.1% previously to lower fuel costs. However, the core inflation rate increased to a new record high of 6.3%. The monthly dataset eased to 0.5% vs 0.6% previously.

The recently higher-than-expected inflation rate in the U.S let the dollar soar while the pound got pressured lower as the odds for a 75bps Fed hike increased.

Today, the pound rose by about 0.5% against the dollar, probably by the easing factor in the inflation rate while the core rate might be under pressure in the New York trading session by the upcoming producer prices data.

UK GDP rebounded less than expected in July while the unemployment rate hit the lowest since 1974. However, more people seemingly move away from the labor force.

Most investors conclude a 75bps interest rate hike from the Bank of England to support the currency and curb the soaring inflationary prices. This may have a bullish effect on the pounds in the upcoming weeks.

Fed’s aggressive approach to hiking interest rates and tightening might be bearish for the cable as the meeting is next week.

The daily interval found dollar-long and pound-short positions around the lower value extreme of the Quarter’s developing VWAP value area. Currently, the rate seemingly establishes a balanced rate as the pound found some buying interest around the bracket lows in today’s session while the 1.6% drop from yesterday’s session might pressure the New York trading session.

The intraday perspective may target the previous session’s VWAP close level around $1.1656 for the pound while the rate trades around the upper day’s value extreme with a rotational behavior, tending to dollar longs and pound shorts.

(Click on image to enlarge)

More By This Author:

Inflation Higher Than Expected While Eased
Crude Oil Drops By Macro High Dollar And Demand Concerns
Technical Market Update For The U.S Session