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UK pound outlook undecided after BoE inflation warning and mixed UK data

British pound (GBP) Price outlook

  • Interest rates could be raised at the November BoE meeting.
  • UK retail sales are disappointing.
  • UK October PMI is above expectations.

NSHupil, chief economist in England, warns that inflation could exceed 5% in the coming months and could put the central bank in a “very uncomfortable place.” In a comment to the Financial Times, Mr. Pill said the November 4 BoE meeting is currently “live” due to a potential rate hike from the current 0.1%. Mr. Pill has joined BoE Governor Andrew Bailey to warn of rising price pressures in the UK.

The hawkish tone of Mr. Pill’s inflation should have boosted higher interest rate expectations, but the market seems to be considering this and instead sees his comments on the interest rate market. “Currently, we are a little too excited to focus on rate hikes,” said Pill, who said the market should take a more cautious approach to rate hike expectations. The market is currently pricing at a 50/50 chance of raising 25 basis points at the November meeting, from the 95% chance before Mr. Pill’s comment.

Today’s UK data release is a mix of September retail sales below expectations, but October Markit PMI data comfortably exceeds expectations and last month’s numbers. IHS Markit emphasized that while the UK’s recovery regained momentum in October, supply shortages hurt manufacturing growth and cost inflation reached record highs.

IHS Markit / CIPS Flash UK Composite PMI

UK pound outlook undecided after BoE inflation warning and mixed UK data

For all major data and event releases DailyFX economic calendar.

British pound sterling today U.S. dollar, 1.3800 trade on either side. Weekly resistance around 1.3835 should hold down the upside in the short term, but the support zone between 1.3710 and 1.3740 should remain today.

GBP / USD Daily Price Chart – October 22, 2021

UK pound outlook undecided after BoE inflation warning and mixed UK data

Retailer data 46.24% of traders are net long and the ratio of short to long traders is 1.16 to 1.Netlong traders are down 1.23% from yesterday and 14.99% from last week, and netshort traders are up 6.93% from yesterday and 5.96% from last week.

We usually disagree with the sentiment of the crowd, and the fact that traders are net shorts suggests. GBP / USD Prices may continue to rise. Positioning has less net shorts than yesterday, but more net shorts since last week.The combination of current emotions and recent changes gives us more Mixed GBP /U.S. dollar Trading bias.

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UK pound outlook undecided after BoE inflation warning and mixed UK data

Source link UK pound outlook undecided after BoE inflation warning and mixed UK data

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