by SignalFactory · November 18, 2020 | 08:38:51 UTC
The cost of living in the UK as represented by the Consumer Price Index (CPI) for October month is due early on Wednesday at 07:00 GMT. The key inflation data will join the current Brexit drama and the coronavirus (COVID-19) headlines to entertain the GBP/USD traders. The price economics gain more importance ahead of BOE Governor Andrew Bailey’s speech, scheduled for release at 16:30 GMT.
The headline CPI inflation is expected to recover from 0.5% before 0.6% on an annual basis. The Core CPI that excludes volatile food and energy items is likely to remain unchanged at 1.3% YoY. Talking about the monthly figures, the CPI bears the pessimistic consensus of -0.1% versus +0.4% prior.
How could it affect GBP/USD?
By the press time of pre-London open on Wednesday, GBP/USD cheers the broad US dollar weakness, coupled with the hopes of a UK-EU trade deal by early next week, to mark 0.07% intraday gains while picking up the bids near 1.3260.
Although recent updates suggesting France’s easing stand on the fisheries demand remove one more hurdle for a Brexit deal, there are many other points where the ex-neighbors, namely the European Union (EU) and the UK, don’t agree. Hence, the Brexit optimism may fade and can join the latest covid-19 resurgence-led woes to weigh on the quote. Downbeat inflation numbers, if matched forecast, may exert additional pressure on the GBP/USD pair.
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