Pound Falls on Weak UK Inflation Data Amid Brexit Summit

The British pound today fell significantly against the dollar following the release of the latest UK inflation data, which missed expectations. The pound was also weighed down by the ongoing European Union Brexit summit, which is not expected to result in a deal.
The GBP/USD currency pair today fell from an opening high of 1.3193 to a low of 1.3124 in the early European session.
The currency pair opened today’s session on a downward trend before recovering slightly and then heading lower after the UK macro releases. According to the Office for National Statistics, the UK consumer price inflation grew by 0.1% in September versus the expected 0.3% increase. The monthly headline CPI data translated into an annualized 2.4%, which was lower than the consensus estimate of 2.6% annual growth. The core CPI data also fell short of expectations by coming in at an annualized 1.9% versus the expected 2.0% print. The retail price index for September, which was also released today, did not meet expectations.
The UK’s producer price index for September and the house price index both of which beat expectations by a large margin had a minimal impact on the currency pair. The pair was also affected by the Brexit summit developments where EU leaders are expected to give British PM Theresa May a hard time today.
The currency pair’s future performance is likely to be affected by Brexit headlines and the release of the US housing data later today.
The GBP/USD currency pair was trading at 1.3145 as at 10:26 GMT having dropped from a high of 1.3193. The GBP/JPY currency pair was trading at 147.48 having declined from a high of 148.25.

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