After consolidating below the 1.6300 handle, GBP/USD broke to the upside and reached a high of 1.6410. The pound also gained against the yen as GBP/JPY closed 69 pips above its 125.12 open price. Is it in for more gains today?
The U.K. didn’t release any economic data yesterday but the improvement in risk appetite was able to push pound pairs higher. It also helped that BOE member Miles remarked that the U.K. doesn’t need additional asset purchases to boost its economy and that monetary policy should eventually normalize.
Today, the U.K. is set to report its CPI and core CPI figures for July. Headline inflation is projected to be up by 4.3% on an annualized basis while core inflation could show a 3.1% increase. Stay tuned for the actual figures due 8:30 am GMT because stronger than expected figures could push the envelope for some tightening moves by the BOE.
Also due anytime today is the BOE inflation letter, which could contain the central bankers’ insights on future monetary policy. Bear in mind that actual inflation is way beyond the BOE’s 2% target so the inflation letter could contain notes on how to tame inflation.