The Sterling pound today rallied to new multi-month highs against the US dollar following the release of the upbeat UK inflation data earlier today. The GBP/USD currency pair today rallied to new 8-month highs against the much weaker greenback on the news.
The GBP/USD currency pair today rallied to a high of 1.3266 based on the inflation report, but quickly gave up its gains dropping to a low of 1.3229 and was off its highs at the time of writing.
The currency pair fell earlier today as investors took profits on their positions following yesterday’s massive rally before the CPI data was released. The pair spiked higher after the UK’s Office for National Statistics released the country’s CPI report for July. Headline inflation rose 0.4% beating analysts estimates of a 0.1% decline translating into an annualised 1% versus the expected 0.6% print. The mixed UK producer price index report for July dragged the pair lower as some figures missed expectations. The positive UK retail price index for July, which came in at 0.5% versus consensus estimates of 0.1% also boosted the pair.
The currency pair’s performance was also supported by the greenback’s overall weakness as tracked by the US Dollar Index, which hit a low of 92.15 today. Investors seem keen to dump the dollar ahead of the November US presidential election, which could see Donald Trump either lose or maintain his position.
The currency pair’s future performance is likely to be affected by US dollar dynamics for the rest of the day.
The GBP/USD currency pair was trading at 1.3249 as at 08:09 GMT, having rallied from a low of 1.3229. The GBP/JPY currency pair was trading at 139.69, having risen from a low of 139.33.
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