UK inflation stays where it is - small dip in GBP
This morning's inflation release out of the UK shows that there is no change in CPI rates, with the headline rate unchanged at 1.9% while the core rate sticks at 1.8%. Even so, these missed on expectations of a rise - in both cases - of a tenth, so the odds of a rate hike have been slightly diminished, prompting a small dip in the Pound.
As it stands, market participants are slowly pricing out the chances of a rate hike from the BoE over the next year, though this is of little consequence with the Brexit process the primary consideration for GBP players near term.
We continue to see Cable trading in a very narrow range, which has seen 1.3100-25 providing stern resistance on the upside. Lower down, 1.3000-1.2950 is the area providing the support and a move below here we refocus attention to levels closer to 1.2800.
A big driver of trade, however, is EUR/GBP, with the cross rate arguably seeing more of the volume and price action in relative terms as we try to push for a move towards 0.8700. 0.8720-25 is the upper limit of the range we are stuck in at present, so the mover higher will get a little more interesting should we reach these levels.