The GBP/USD currency pair today tumbled to new lows after the release of soft UK CPI data by the Office for National Statistics early in the European session. Today’s decline extends the pound’s drop for the second consecutive session this weak after yesterday’s massive drop occasioned by news of a leadership crisis in the UK.
The GBP/USD currency pair lost over 50 points from its daily highs to hit a low of 1.3073 at the height of its decline.
The release of the UK consumer price index for October triggered the sterling’s significant decline against the greenback. The CPI came in at 0.1% on a monthly basis as opposed to the expected 0.2%. The annualized CPI print was recorded at 3.0%, which was lower than the expected 3.1% print. Other releases from the UK socket such as the retail price index and the producer price index also did not meet expectations. The retail price index was reported at 4.0% on an annualized basis as compared to the market consensus of a 4.1% rate.
The currency pair was also affected by the uncertainty regarding Theresa May‘s government given the recent scandals that have rocked her government. The pair witnessed a massive decline yesterday after a news report by the Times indicating that 40 Tory MPs were ready to sign a letter of no confidence in PM May’s leadership.
The currency pair’s future performance is likely to be affected by political events in the UK and tomorrow’s release of the US CPI data.
The GBP/USD currency pair was trading at 1.3110 as at 11:38 GMT having retraced most of its losses from a daily low of 1.3073. The GBP/JPY currency pair was trading at 148.96 having dropped from a high of 149.44.
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