EURGBP: U.K. Inflation and Key Trends
Inflation in the UK remained stable in August at 2.2%, according to data from the Office for National Statistics (ONS). However, rising prices in the services sector have raised concerns for the Bank of England (BoE). This increase in the services sector, which is a key indicator of domestic price pressures, rose to 5.6% from 5.2% in July, exceeding market expectations. The BoE had cut interest rates to 5% on August 1 and expected headline inflation to reach 2.4% in August, with the Consumer Price Index (CPI) forecast to reach around 2.75% by the end of 2024. Despite the current figures, the BoE is expected to keep interest rates unchanged at its next meeting.
The rise in inflation in the services sector is partly attributed to the significant increase in air fares, which rose by 22.2% between July and August, representing one of the largest increases since 2001. Sterling strengthened against the dollar following the release of the data, and bets on a rate cut by the BoE were reduced to a probability of around 28%.Prime Minister Keir Starmer's government stressed that although inflation is more manageable compared to the peak of over 11% almost two years ago, prices remain elevated, which continues to pose a challenge for the UK economy.
Currently the Carry-Trade movement of the EURGBP is moving through the middle zone within the long-term range. Its maximum movement is located at 0.87142 and the minimum at 0.83821 euros, looking at the chart there has been a double bounce that coincides with pump and dump movements between July 25 and September 1, currently the RSI marks us 45.25% which presents slight oversold. The Control Point (POC) puts the target around 0.85506 so we could see a new return to this area of displacement that coincides in the middle of the long term range.
Ion Jauregui - Activtrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The rise in inflation in the services sector is partly attributed to the significant increase in air fares, which rose by 22.2% between July and August, representing one of the largest increases since 2001. Sterling strengthened against the dollar following the release of the data, and bets on a rate cut by the BoE were reduced to a probability of around 28%.Prime Minister Keir Starmer's government stressed that although inflation is more manageable compared to the peak of over 11% almost two years ago, prices remain elevated, which continues to pose a challenge for the UK economy.
Currently the Carry-Trade movement of the EURGBP is moving through the middle zone within the long-term range. Its maximum movement is located at 0.87142 and the minimum at 0.83821 euros, looking at the chart there has been a double bounce that coincides with pump and dump movements between July 25 and September 1, currently the RSI marks us 45.25% which presents slight oversold. The Control Point (POC) puts the target around 0.85506 so we could see a new return to this area of displacement that coincides in the middle of the long term range.
Ion Jauregui - Activtrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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