DailyFX.com -

Talking Point:

  • U.K’s CPI (YoY) Slowed to 1.5% in May vs 1.8% in April; 1.7% Est.
  • U.K’s CPI (MoM) Slowed to -0.1% in May vs 0.4% in April; 0.2% Est.
  • GBP/USD Plunged As Soft Inflation Undermines BOE Policy Action

Want to trade with proprietary strategies developed by FXCM? Find out how here.

UK Consumer Price Index (CPI) came in at 1.5 percent year-on-year for the month of May, which was down from 1.8 percent in the previous month. It missed economists’ expectations for 1.7 percent increase and was the slowest pace of growth in inflation gauge since October 2009. Meanwhile, month-on-month CPI registered -0.1 percent and missed analysts’ expectations for a 0.2 percent increase.

Following the data release, GBP/USD plunged by close to 40 pips to trade at 1.6944, compared to 1.6977 ahead of the figures. According to DailyFX Currency Analyst David Song, the pullback in GBP/USD may be due to the limited Bank of England’s (BoE) scope to normalize monetary policy sooner rather than later.

From a technical perspective, support for GBP/USD rests at 1.6897,while resistance looms overhead near 1.6960.

GBP/USD 5 Minute Chart

GBP/USD Plunges After UK CPI Grows At Slowest Pace Since October 2009

Chart Created Using FXCM Marketscope 2.0


Edward Hyon, DailyFX Research Team

Keep up to date on event risk with DailyFX Calendar

Related Articles
  1. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  2. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  3. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  4. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  5. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  6. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  7. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  8. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  9. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  10. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!