The latest economic data out of the United Kingdom was disappointing in general, and resulted in the Pound sliding to a fresh 10-month trough versus the US Dollar. In a recent poll of economists, they had predicted that June's Consumer Price Index and Core Consumer Price Index would both rise to 2.6% and 2.2%, respectively. However, the UK's Office of National Statistics reported the figures as 2.2% (unchanged on a year-over-year basis) and 1.9%, falling from the previous reading of 2.1%. With the balance of the other inflation related data generally a miss, with the exception of Producer Price Inflation Inputs, that had the overall affect of shifting sentiment away from the Pound.
As reported at 11:18 am (BST) in London, the GBP/USD was trading at $1.3041, down 0.54% and moving off the session trough of $1.3010 while the high is a distant $1.3117. The EUR/GBP is higher at 0.89141 Pence, a gain of 0.27%; the pair has ranged from 0.88742 Pence to 0.89236 Pence.
Shift on Euro Inflation Outlook?
Data for the Eurozone was also released, with the Core Consumer Price Index hitting 0.9% for June, off the 1.0% expected, while the Consumer Price Index met forecasts of 2% for June (year-over-year). With headline inflation now at the 2% target rate, that could put a dent in sentiment for an interest rate adjustment from the European Central Bank. Mario Draghi, the president of the ECB, had said that the inflation outlook seemed to justify reining in their massive QE program. Analysts caution that today's data could result in a setback to that way of thinking. The ECB will make an interest rate decision next week. The EUR/USD was trading at $1.162, down 0.33%; the pair has ranged from $1.16071 to $1.16650 in today's trading day.