Pressure eased if only momentarily for the GBP this morning following the year on year CPI figures which showed inflation had exceeded the target of 0.5%. Sterling was also helped by positive numbers from PPI and RPI data. The CPI figure of 0.6% in particular was viewed positively from the markets and GBP Euro moved from its overnight level of 1.1473 to 1.15.26. The increase was attributed to rising transportation costs including; fuel and second hand cars. Â The report also explained that the cost of Alcoholic beverages had also increased 0.5% but Gas, electric and water remained unchanged.
The GBPâ€™s measured gains were also enjoyed against the dollar and sterling picked itself up from the market opening at 1.2932 to the market close of the 1.3042.
The Sterling rally against the Euro was short lived as German ZEW figures were released showing although confidence had diminished that many felt sentiment had improved quickly following the Brexit. Also from the Euro zone was the trade balance figure which came in around expectation. The number showed that the trade deficit had been cut from the last reading of 24.6BN to 23.4BN.
The gain sterling made reversed and by lunch sterling returned to 1.14768.
After 1.30pm (GMT) the Canada and the US began to release their data.
Canadian manufacturing figures for the month hit the forecast number of 0.8% as did US building permits and CPI figures. Reaching 1.15M and 0.0% respectively.
US housing starts exceeded expectation reaching 1.21M. industrial production for the month also increased to 0.7% from last monthâ€™s figure of 0.4% and exceeding the monthâ€™s objective of 0.2%.
Following the data, the USD came under pressure from many of the majors including the EUR and GBP.
The figures naturally made the chance of a FED rate hike in 2016 less likely.
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