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Weekly Roundup: Disappointing UK inflation fails to weigh down pound

currency-newsWeekly Roundup: Disappointing UK inflation fails to weigh down pound
A weaker-than-expected UK consumer price index was not enough to weigh down the pound last week, even as the odds of an upcoming Bank of England (BoE) interest rate cut mounted.

As the headline inflation rate eased from 1.7% to 1.5% in October this offered fresh cause for policymaker dovishness, boosting the risk of a 2020 interest rate cut.

However, GBP exchange rates soon returned to a positive footing thanks to the relative weakness of many of the majors.

Hopes that the UK could avoid another hung parliament in the upcoming December general election also helped to put a temporary floor under the pound.

With November’s CBI industrial trends orders index forecast to show a modest improvement on the month the mood towards the pound could pick up further on Tuesday.

If the economy appears on track to recover some of its lost momentum before the end of the year this is likely to give GBP exchange rates a lift.

However, any fresh signs of a slowdown in November’s manufacturing and services PMIs would leave the pound vulnerable to renewed selling pressure.
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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