When are the UK CPIs and how could they affect GBP/USD?

The UK CPIs Overview

The cost of living in the UK as represented by the consumer price index (CPI) for October is due later on Wednesday at 0930 GMT.

The headline CPI inflation is expected to arrive at -0.1% inter-month in October while the annualized figure is seen a touch lower at 1.6%. The core inflation rate that excludes volatile food and energy items is likely to have steadied at 1.7% YoY last month.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. 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.

How could it affect GBP/USD?

At the press time, GBP/USD is seen wavering in the familiar range around the midpoint of the 1.28 handle, struggling for a sustained upmove amid mixed UK jobs data and narrowing gap between the Tories and Labour in the race to the December poll. A bigger-than-expected decrease in the UK price pressures could refuel the declines in the pound back towards the 1.28 handle vs. the greenback.

“The resistance-turned-support, currently near the 1.2800 handle, should now act as a key pivotal point for short-term traders. Failure to defend the said support might turn the pair vulnerable to accelerate the slide back towards testing the 1.2715-10 region with some intermediate support near the 1.2770-65 region. On the flip side, bulls are likely to wait for a sustained move beyond the 1.2900 handle before positioning for a further near-term appreciating move towards 1.2965-70 intermediate resistance. The momentum could further get extended and assist the pair to aim back towards reclaiming the key 1.30 psychological mark,” FXStreet’s Analyst Haresh Menghani notes.

Key Notes

GBP Futures: remains sidelined near term

UK inflation report outlook: GBP/USD may stumble on another CPI slide

Hard Brexit fears ease as UK PM Johnson’s hopes rise – Reuters poll

About the UK CPIs

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).