Pound Sterling Faces Selling Pressure Amid UK Inflation Data
On Wednesday, October 16, Pound Sterling remained under selling pressure as markets digested the September inflation data from the UK. Later in the day, the US economic docket will feature Export Price Index and Import Price Index data for September.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against major currencies today. The British Pound was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.64% | 0.03% | 0.02% | 0.24% | 0.36% | 0.05% |
The Office for National Statistics (ONS) reported that annual inflation in the UK, measured by the CPI, declined to 1.7% in September from 2.2% in August. This was below market expectations of 1.9%. The GBP/USD pair turned south following these inflation prints, losing over 0.5% below 1.3000.
US Dollar Strength and Market Sentiment
The US Dollar (USD) maintained its strength as negative sentiment prevailed in the American session on Tuesday. The USD Index traded at its highest level since early August above 103.30. US stock index futures were mixed after significant losses on Wall Street.
Meanwhile, data from Japan showed a decline in Machinery Orders by 1.9% on a monthly basis in August. The USD/JPY pair showed no immediate reaction and traded sideways above 149.00.
European and Australian Currency Movements
EUR/USD struggled to rebound after closing in the red on Tuesday, trading below 1.0900. AUD/USD remained on a downward trend below 0.6700 early Wednesday. Investors await Australia’s September employment data, with expectations for the Unemployment Rate to remain steady at 4.2%.
Commodity and Gold Prices
Gold continued to rise early Wednesday, reaching its highest level since September 26 above $2,670.
Inflation FAQs
Here are some commonly asked questions about inflation:
- Headline inflation measures the rise in the price of a representative basket of goods and services on a monthly and yearly basis.
- Core inflation excludes volatile elements such as food and fuel and is targeted by central banks to keep inflation around 2%.
- High inflation can increase a country’s currency value as central banks raise interest rates to combat it.
- Gold’s relationship with inflation is complex, as high inflation can lead to higher interest rates, which are negative for Gold.
Overall, understanding inflation and its impact on currencies and assets is crucial for making informed financial decisions.