- Pound Sterling is still inside the woods as investors are sidelined ahead of inflation data.
- United Kingdom’s inflation is expected to soften slowly as labor market conditions are extremely tight.
- The Bank of England is expected to raise interest rates further to sharpen its quantitative tools against stubborn inflation.
The Pound Sterling (GBP) is stabilizing on Monday above 1.2800 after showing a big bullish performance last week, rallying to levels not seen since April 2022, above 1.2800. Investors are keeping an eye on the United Kingdom’s key inflation data, to be released on Wednesday at 6 GMT. The GBP/USD pair is showing a severe contraction in volatility to start the week, ahead of the release of key price indicators, which will provide guidance about the interest rate policy from the Bank of England (BoE).
Tight labor market conditions and higher food prices in the United Kingdom have remained major catalysts that have been keeping inflationary pressures elevated. More interest rate hikes by the UK central bank are widely expected as inflation has not shown yet evidence of coming down.
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Source: www.fxstreet.com
ENB
Sandstone Group
