How Do UK CPI figures Impact GBPUSD?

How do UK CPI figures impact GBPUSD? When will the Consumer Price Index be released today?

18 September, OctaFX – The cost of living in the UK as represented by the consumer price index (CPI) is due on Wednesday at 0830 GMT.

The headline CPI inflation is expected to increase to 0.5% inter-month in August while the annualized figure is seen ticking lower slightly to 2.4%. 

The core inflation rate that excludes volatile prices of food and energy items is also expected to have softened to 1.8% last month.

Deviation impact on GBPUSD

The map of FX Street’s proprietary deviation impact bellow explains more about the event. As observed, the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.

UK CPI Figures Impact on GBPUSD Explained

A positive surprise in the UK CPI figures is likely to offer the much-needed impetus to the GBP bulls, that could help the rates retest the seven-week tops at 1.3175, above which the upside targets lie at 1.3210 (daily R2/ Fib R3) and 1.3250 (psychological levels).

On a bigger-than-expected drop in the headline and core readings, the GBPUSD pair could fall to the 100-DMA support at 1.3102 below which floors open up for a test of 1.3076 (d10-DMA) and 1.3026 (Sept 13 low).

About the UK CPI

The Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. 

The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).


This article was provided by OctaFX. It should NOT substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.

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