The British pound is stronger today thanks to the rebound in house prices this month reported by online property listing site Rightmove.
This may be important, but not as important to British pound traders as tomorrow’s UK consumer price report. The strength of the British pound last month should reduce inflationary pressure significantly. If a drop materializes, there will be less pressure on the Bank of England to raise interest rates. If commodity prices dominate however, we could see a sharp break to the upside in the GBP/USD. The currency pair is pressing against the top of its month to date range and looks prime for a breakout.
Written By Kathy Lien, Chief Currency Strategist for dailyFx.com