GBP/USD Consolidates Gains Made After Release of UK CPI Data

The GBP/USD today maintained the gains made after the release of UK Consumer Price Index data for February released by the Office for National Statistics, which beat expectations. The currency pair was largely unaffected by the better-than-expected US currenct account deficit.

The currency pair gained over 100 points after the UK CPI data was released and the British pound rallied against its main peers.

The Currency pair’s rally was largely due to the UK Consumer Price Index data, which indicated that consumer prices had risen by 0.7% in February versus the expected 0.5%. The annualized CPI figure was also recorded at 2.3% as compared to the expected 2.1% percent. The British pound’s rally was slightly affected by the comments from Bank of England Governer, Mark Carney, who stated that the bank could not react to a solitary data point even if the CPI data indicated the UK’s inflation had met the BoE’s target.

The currency pair was not affected by the US current account deficit released by the US Bureau of Economic Analysis, which had declined to $112.4 billion in the fourth quarter, as compared to the third quarter’s $116.0 billion. The positive current account data did not boost the US dollar as declining US bond yields increased the selling pressure on the greenback.

The currency pair’s performance is likely to be affected by the US existing home sales data for February scheduled for release tomorrow.

The GBP/USD was trading at 1.2478 as at 16:27 GMT having rallied from a low of 1.2358 prior to the announcement. The EUR/GBP was trading at 0.8665 having dropped from a high of 0.8726. The

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