Sterling is under pressure despite the hawkish statements from Carney and the more than 5-year record high CPI. GBP/USD fell below 1.3200 and locked our target, while FTSE 100 is developing within a sideways channel and reached our 7520 target, near the lower boundary.
The dollar is overall trading higher, however, the USD/CAD had a neutral day despite that it fell below 1.2500.
British Pound Under Severe Pressure Despite Carney’s Hawkish Statements
The British pound plunged versus its G10 currencies on Tuesday and early Wednesday despite the hawkish comments from the BoE Governor Mark Carney and the positive CPI data. In his testimony before the Treasury Select Committee, Carney stated that a rate hike may be appropriate in the near future and underlined that the bond-buying program of 2016 has been positive for the British economy. However, the fears of Brexit diminished his upbeat comments, and sterling remained under pressure.
The CPI report revealed a strong print of 3.0% for the headline inflation rate in September, the highest since April 2012, following 2.9% in August. The main driver of this increase was the rising prices in food, transport and leisure activities. Today, the U.K. labour report will be eyed.
Read the full financial markets daily report on JFD Research.