Every week we expect many interesting events that can shake the market.
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.
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The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.