Pound Climbs As U.K. Inflation Improves To 7-Month High
19 Settembre 2018 - 08:02AM
RTTF2
The pound spiked up against its major counterparts in the early
European session on Wednesday, after a data showed that U.K.
inflation rose to a seven-month high in August.
Data from the Office for National Statistics showed that
consumer price inflation increased unexpectedly to 2.7 percent in
August from 2.5 percent in July. This was the highest rate since
January. Economists had forecast inflation to ease to 2.4
percent.
Month-on-month, consumer prices climbed 0.7 percent, faster than
the expected 0.5 percent.
Core inflation that excludes energy, food, alcoholic beverages
and tobacco, rose to 2.1 percent from 1.9 percent in July.
Another report from ONS showed that output price inflation
slowed to 2.9 percent in August, in line with forecast from 3.1
percent a month ago. Compared to July, output prices gained 0.2
percent.
Input price inflation slowed to 8.7 percent from 10.3 percent in
July. The expected rate of increase was 9.1 percent. On a monthly
basis, input prices rose 0.5 percent after staying flat in
July.
European shares rose amid bets that China and the U.S. will
resume contentious trade talks after the latest tariff round.
In addition, speculation is rife that China will increase
economic stimulus to soften the blow of the higher U.S.
tariffs.
The currency has been trading in a positive territory against
its major counterparts in the Asian session, with the exception of
the euro.
The pound appreciated to more than a 2-month high of 1.3215
against the greenback, from a low of 1.3136 hit at 5:00 pm ET. On
the upside, 1.34 is possibly seen as its next resistance level.
The pound firmed to 1.2746 versus the franc, its highest since
August 10. This follows a low of 1.2670 touched at 5:00 pm ET. If
the pound climbs further, 1.30 is likely seen as its next
resistance level.
The Swiss federal government's expert group raised its growth
outlook for 2018 but maintained the estimate for 2019.
The State Secretariat for Economic Affairs said the economy is
forecast to grow 2.9 percent this year instead of 2.4 percent
projected in June. The outlook for 2019 was retained at 2
percent.
Reversing from an early low of 147.61 against the yen, the pound
climbed to more than a 2-month high of 148.54. The next possible
resistance for the pound is seen around the 150.00 level.
The Bank of Japan kept its ultra-loose monetary policy
unchanged, as widely expected.
The policy board of the BoJ decided to purchase government bonds
so that the yield of 10-year JGBs will remain at around zero
percent.
The pound advanced to a 1-1/2-month high of 0.8861 against the
euro, reversing from a low of 0.8901 hit at 4:15 am ET. The pound
is seen finding resistance around the 0.87 area.
Looking ahead, U.S. housing starts and building permits for
August are scheduled for release in the New York session.
At 9:00 am ET, the European Central Bank President Mario Draghi
speaks at an event hosted by the Jacques Delors Institute, in
Berlin.
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