Pound Sterling (GBP) Soars against Competition after Ipsos Mori Poll

May 17, 2016 - Written by Minesh Chaudhari

STORY LINK Pound Sterling (GBP) Soars against Competition after Ipsos Mori Poll

The Pound has been a major contender against its peers today, due to a recent optimistic Ipsos Mori poll putting the 'Remain' vote firmly in the lead.

The Pound has lost out against a number of rivals today, due to falling national inflation for April.

Pound Sterling (GBP) Exchange Rate: UK Consumer Prices Data in Focus

The highlight of this morning’s session in the global currency markets comes in the form of April’s UK Consumer Price Index inflation data. Last month’s counterpart release revealed year-on-year 0.5% result, pointing to a higher than expected pace of price rises for the domestic economy.

This month’s print is expected to be identical – anything other than this and the Pound Sterling (currency : GBP) is forecast to experience pronounced price action thanks to the effect it will have on medium-term UK interest rate expectations. The minutes of the latest Bank of England monetary policy meeting, which took place earlier this month, noted that,

‘Twelve-month CPI inflation increased to 0.5% in March but remains well below the 2% inflation target. This shortfall is due predominantly to unusually large drags from energy and food prices, which are expected to fade over the next year. Core inflation also remains subdued, largely as a result of weak global price pressures, the past appreciation of sterling and restrained domestic cost growth.’

If this morning’s UK CPI data suggests that a return to 2.0% inflation remains a long way off, then expect the Pound euro exchange rate to drop off, with a retracement back down to the 1.2500 GBP EUR level possible.

US Consumer Prices Data to Provoke Market Changes

Elsewhere, yesterday’s Rightmove survey of the UK property market revealed that, as per analysts’ expectations, the average British property sold price increased by 0.4% during May. The year-on-year version of the figure pointed to a hefty 7.8% increase – up from last month’s annualised showing of 7.3%. The news helped the Pound edge higher across the board as the session progressed.

Looking ahead, the next tier one data release of note after this morning’s UK inflation data comes from the States at 1330hrs BST with the publication of April’s US CPI inflation numbers. In a similar set up to the UK version of the data, analysts forecast that a higher than anticipated showing will assist the US Dollar (currency : USD) by heightening investors US interest rate expectations.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Euro Forecasts Pound Sterling Forecasts