Sterling Falls Despite Upbeat UK Inflation As Dollar Rallies on Stimulus Hopes

The Sterling pound fell against the dollar despite the release of upbeat UK inflation data as the greenback remained supported by the rising US Treasury yields. The GBP/USD currency pair fell from fresh 34-month highs hit yesterday as the dollar continued to benefit from the $1.9 trillion US stimulus package’s broad expectations.
The GBP/USD currency pair fell from a high of 1.3903 in the early London session to a low of 1.3841 in the American market and was trading near these lows at the time of writing.
The currency pair’s decline was tempered by investor optimism about the potential early reopening of the UK economy and its rapid COVID-19 vaccination progress. The release of the UK consumer price inflation report for January had a muted impact on the pair. According to the Office for National Statistics, the country’s inflation was -0.2% in January beating consensus estimates of -0.4%. The UK’s producer price index print also beat expectations as did the retail price index, which came in at -0.3% beating analysts estimates of -0.4%. Comments from British Prime Minister Boris Johnson saying that he will set out the country’s reopening schedule on February 22 had a muted impact on the pair.
The pair extended its losses after the Census Bureau released the US retail sales data for January. US retail sales grew 5% in January handily beating analysts’ expectations of 1% growth.
The currency pair’s future performance is likely to be affected by US dollar dynamics given tomorrow’s empty UK dockets.
The GBP/USD currency pair was trading at 1.3848 as at 15:04 GMT after dropping from a high of 1.3903. The GBP/JPY currency pair was trading at 146.74 having fallen from a high of 147.36.
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Original from: www.earnforex.com