2022 was rough: inflation, energy crisis, and plenty of other controversial situations…
The UK Awaits High Inflation
What will happen?
Britain’s Office for National Statistics will release an annual change in Consumer Price Index on March 23, at 09:00 MT time (GMT+2). This is the UK’s most important price data because central banks use it for setting the inflation target. This release is considerable for all GBP-related pairs, like GBPUSD and EURGBP. Although the reports come out monthly, they represent an annual change by comparing the data with the average price change over the last year. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates.
GBPUSD movement overview
The last UK CPI release turned out to be a little bit higher than expected. However, as being a safer currency, the dollar rose. As for now, the UK inflation is going to affect the market due to Russia-Ukraine tensions. Because of supply shortages and thousands of restrictions for Russian imports, the UK prices are likely to rise significantly over this year. In few weeks, the gas prices rose from 1.50 to 1.65 pounds per liter. As usual, high prices will lead to rate hikes and harsher monetary policy in the near future. That’s why the Pound Sterling is likely to rise even more against the greenback.
How to trade on Britain’s CPI release?
Higher-than-expected numbers will boost the GBP. However, GBPUSD may fall due to the widening wedge technical price pattern.
- If the actual number is higher than expected, then GBP will rise.
- Otherwise, GBP will move sideways.
Check Economic Calendar.
Instruments to trade: GBPUSD, EURGBP, GBPCAD.
The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
Happy Monday, dear traders! Hope you had a great weekend and you’re ready for the last trading week in 2022! Later this week we’ll announce some exciting news for you, but now let’s look through some interesting news! Today’s events: USA, UK, Hong…
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