British headline CPI ticked up from 3.4% to 3.5%, as expected. The only surprise came from Core CPI, which rose from 2.4% to 2.5%.
The early move of GBP/USD higher is supported and the pair ticks a bit higher. The chances of more QE in Britain are now lower.
The Retail Price Index (RPI) slid from 3.7% to 3.6%, as predicted. DCLG HPI rose by 0.3%.
Last month, CPI fell from 3.6% to 3.4%. While this was expected, it left more room for another round of quantitative easing.
GBP/USD rallied before the release and climbed above 1.59. It continued the recovery after falling and finding support around 1.5820 yesterday, when the dollar rallied across the board.
With the change in the dollar’s fate, the pound climbed. The last surge towards the release came from the 1.5860 line.
GBP/USD now trades just under 1.5950, with the round 1.60 number in sight. The round psychological line capped the pair last week in an impressive manner.
For more on the pair, see the British pound forecast.
Tomorrow, Britain will publish employment data, which also tends to have a strong impact on the pair. The unemployment is expected to remain unchanged at 8.4%, while the number of jobless claims (Claimant Count Change) will likely continue rising, by 6.6K.
Another simultaneous release tomorrow is the meeting minutes from the last rate decision. We’ll get to see how many members continued supporting further QE. 2 dovish members probably remained in support.Get the 5 most predictable currency pairs