GBP/USD still likely to head higher
This morning has seen the Office for National Statistics (ONS) post a bigger than expected rise in inflation, as it jumped from 1.6% up to 1.8%. Last month saw earnings growth increase at a faster rate than inflation for the first time in years and only a couple of weeks later, inflation had once again overtaken it.
GBP/USD had spent most of the morning creeping higher in anticipation of this morning’s data, but since the release it has dropped almost all of the morning’s gains. As David Madden pointed out yesterday, the concerns that Bank of England governor Mark Carney has over the UK housing market are unlikely to be eased with the ONS confirming that house prices driven by the London market had increased by 8.5% in England.
The outlook still remains for the GBP/USD price to head higher even if today’s data might offer short-term weakness.