The Pound Pressured By Forecast Beating UK Inflation Of 10.1%

The inflation rate in the United Kingdom reached 10.1% in September vs 9.9% in August, beating market forecasts of about 10%.

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  • Main increases came from food 14.8% vs 13.4% followed by housing and utilities with 20.2% vs 20%. Reason: higher prices for electricity and gas.
  • Transportation slowed the inflation with an increase of about 10.6% vs 12%.
  • Core rate which excludes energy, food, tobacco and alcohol reached a record of 6.5%.
  • The monthly data increased by about 0.5% in September.

The pound fell by about 0.4% against the dollar in early European trading sessions as traders went for safe-haven assets due to fiscal concerns and the further upcoming interest rate hikes of the more hawkish US Federal Reserve.

  • The Bank of England is about to hike interest rates next month to combat inflation which pressures the currency.
  • The surge in Natural gas prices hits the British economy for bearish tendencies.
  • Labor shortages and supply issues due to the past COVID situation pressures additionally.
  • Forecast of the pound’s value pointing to the downside, according to algorithm calculations.

The daily interval trades around the Quarter’s upper value extreme with a balanced behavior, hence investors may lean on the extreme of the rotational price range. The mentioned Quarter’s DVAH still might lead to dollar interest for a potential rotation towards the DVAL.

The hourly interval may find buyers as pullback into the New York trading session while core sellers might be sitting around the previous VWAP close level.


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Pound: Widening Of Daily Gilt Purchase Operations By BoE

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