Pound Jumps to One-Year High (GBP/USD) on UK Inflation, GBP/AUD 0.60% Higher12 September 2017 by FC Exchange
The pound rocketed in Tuesday's European trading after inflation figures beat forecasts, say industry experts FC Exchange.
The pound jumped against other currency majors on Tuesday when UK inflation data came in stronger-than-forecast. The month of August registered 2.9% inflation on the year up from the previous 2.6% reading and bypassing the 2.8% forecast. The July figure had seen inflation stumble for the first time since October and the pound sank as speculation circled that lower inflation may relieve pressure on the Bank of England (BoE) to raise rates. However, Tuesday’s consumer price index (CPI) rekindled hopes that the UK may see an interest rate increase in the near future.
Economist Ben Brettell said: ‘Inflation ticked up again in August, with increased petrol and diesel prices contributing to a year-on-year figure of 2.9%, up from 2.6% in July and matching May’s four-year high. This will inevitably raise questions about the UK’s ongoing cost of living squeeze. Data released tomorrow is expected to show pay increasing at 2.2% in the three months to July, meaning wages are still shrinking in real terms. Yet it looks likely that inflation will fall back in the coming months as the effect of Brexit-induced sterling weakness fall out of the year-on-year calculation.’
UK labour market data is also scheduled for release this week and could give more reason for the pound to climb if it prints positively. The Bank of England is due to meet on Thursday and will announce its latest monetary policy and interest rate decision then which could catalyse significant sterling fluctuations.
The GBP/EUR exchange rate is currently trending around 0.70% higher at interbank levels of 1.1087, while the GBP/USD exchange rate hit a one-year high residing around 0.70% higher at 1.263. Sterling is trending around 0.60% higher against the Aussie at 1.6512. The pound has also been able to climb by around 1.00% against currencies such as the Japanese yen, Mexican peso, and Norwegian krone.
Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.
Learn more about the Australian Dollar – Contact FC Exchange: Get A Quote
Want to live and work Down Under? Click here for expert help: Skilled Migration to Australia
Want to get a job Down Under? Click here for expert help: How to Get a Job in Australia
Click here for expert help with travel visas: Travel Visas to Australia
Click here for tourist information about Australia: Visit Australia