Happy Friday, traders! Are you ready to trade at the end of the week? Here’s what you need to know before you start:
British inflation may send the GBP up
What will happen?
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3). This is a very important indicator that shows the change in the price of goods and services purchased by consumers during the previous month.
Why is it important?
The inflation figures are very important. Based on their growth, the central bank of a country decides whether or not it needs to raise the interest rate. Therefore, the domestic currency rises as well.
In the picture below, you can see how bigger-than-expected CPI affected the performance of GBP/USD. The pair surged significantly.
How to trade on the British Inflation Rate?
It’s easy! Just compare the actual British Inflation Rate with the market forecast, which appears a few days before the report in the economic calendar.
- If the Inflation Rate is greater than the forecasts, the GBP will surge.
- Otherwise – fall.
Instruments to trade: GBP/USD, GBP/JPY, EUR/GBP
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