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Inflation in the UK reaches a 40-year high, GBP / USD is falling

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Inflation in the UK and GBP / USD – prices, charts and analysis

  • Headline inflation reaches 9%, core inflation rose to 6.2%.
  • Sterling declines after Tuesday’s rally.

Prices in the UK rose 9% in April compared to the same period last year, a new 40-year high and another worrying figure for the Bank of England (BoE). While this figure will provoke many tabloid headlines, financial markets expected a slightly higher rate of 9.1% today, leaving sterling relatively unchanged to lower after release.

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The next report is retail sales on Friday for April. This report, which is always volatile, is expected to show consumers who are firmly in their pockets and sales are declining. Excessively high inflation and consumer restraint in spending – this is a serious double for the Bank of England.

British Pound Last: UK inflation reaches 40-year high, GBP / USD falls

GBP / USD on Tuesday jumped more than 1.3%, the best figure in almost 18 months after a report on vacancies in the UK showed that the labor market remains in poor health. Unemployment fell to 3.7%, the lowest level in 50 years, while average wages, including bonuses, rose 7% in March as employers paid more to keep existing staff.

The rally in cable also helped a little weaker US dollar as traders cut recent rates on the dollar. The US Dollar Basket (DXY) was hit by a hawk euro comment by ECB Board member Klaas Nota, who was discussing the possibility of raising the rate by 50 basis points this year, for the first time when any of the board members mentioned that figure. The euro rose, lowering the basket of US dollars. The cable reached and then turned around 1.2500 on Tuesday, a 61.8% Fibonacci retracement level, and now the couple is looking to see if it can break below 1.2400. Below here support is visible at 1.2382 and 1.2274.

GBPUSD daily price chart for May 18, 2022

British Pound Last: UK inflation reaches 40-year high, GBP / USD falls

Show retailer data 69.52% of traders are pure longs with a long traders ratio and a short of 2.28 to 1. The number of net-long traders is 12.59% less than yesterday, and 19.96% less than last week, while the number of net-short traders is 40.21% higher than yesterday, and 50 , 83% higher than last week.

Usually we have conflicting views on the mood of the crowd, and the fact that traders work online suggests GBP/USD prices may continue to fall. However, traders are less network long than yesterday and compared to last week. Recent mood swings warn that current The GBP / USD price trend may soon change upwards, although traders remain clean.

What is your view on sterling – bull or bear ?? You can let us know via the form at the end of this article or contact the author via Twitter @ nickcawley1.

https://www.dailyfx.com/forex/market_alert/2022/05/18/British-Pound-Latest-UK-Inflation-Hits-a-40-Year-High-GBPUSD-Slides.html

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