The Pound Finds No Foothold in the Statistics. Fundamental Overview for 19.02.2020

19.02.2020

The British pound is getting weaker in pair with the US dollar. The current quotation is 1.2983.

Britain has published a block of interesting macrostatistics today. For example, the consumer price index grew by 1.8% calculated per annum in January against 1.3% a month before. The forecast had been more modest – 1.6% (calculated per annum). The basic inflation also became more active, amounting to 1.6% (calculated per annum) against 1.4% the previous month.

The growth of the consumer price index supports the position of the Bank of England that has decided to postpone stimulation of the economy and the decision on the interest rate. Earlier, the BoE avoided any sharp movements due to Brexit or the bracing of the major economic processes. Practice shows the decision was right.

The producer price index at the beginning of January grew by 0.9% (calculated per month) after growing by the same value in December. The same index but at the end of the month, increased by 0.3% (calculated per month) after a zero surplus a month before.

Retail sales prices increased by 2.7% (calculated per annum) in January – it was mightier growth than forecast (2.5%) and than in December (2.2%).

Well, the British inflation is on its 6-month maximum. The components of the main report show that it was due to the growth of the prices on energy carriers and plane tickets. If so, the current growth is local, and by March, it will have lost the edge. Anyway, the increase in the inflation we are witnessing decreases the possibility that the BoE will lower the interest rate in the future. It must have supported the pound, but avoiding external risks is more important now.

Attention!

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.