The latest inflation data from the UK Office of National Statistics showed that CPI for March rose to 0.7% after February's 0.4% reading, driven largely by a hike in retail prices as well as global oil. While the speech from the Bank of England's Andrew Bailey seems to be driving sentiment currently, FX traders took the inflation news in stride. Currency strategists concur that, at this point, it isn't CPI that will shift sentiment for Sterling, at least not in the short term. There is some speculation that the UK central bank will raise key interest rates before the end of 2022, but there is more certainty that such a move will not be occurring anytime soon. In the meantime, markets will be focusing on the upcoming PMI data to better gauge the British economic recovery.
In London trading as of 11:30 am, the GBP/USD was trading lower at $1.3929, down 0.0208%; the pair has ranged from a low of $1.39096 to a high of $1.39504 in today's session. The EUR/GBP was down at 0.8614 Pence, a loss of 0.2328%, off the session trough of 0.86123 Pence. The GBP/JPY was higher at 150.617 Yen, a gain of 0.0119%.
Market to Focus on BOC Policy Decision
A little later today, markets will be focusing on the Bank of Canada's monetary policy decision and the accompanying statement. The latest poll of economists suggests that the BOC will hold rates at the current level of 0.25%. What will be relevant in the governor's speech is how the Coronavirus is impacting the country's economy, given its proximity to the US. Currently, borders between the two nations are still closed. The USD/CAD was trading at C$1.2596, down 0.06%, with the pair ranging from a low of C$1.25823 to a peak of C$1.26183 in today's session.