The Pound is slowly growing. Overview for 20.01.2021
GBPUSD has been slowly rising for the fourth consecutive trading session.
On Wednesday, the British Pound intends to keep its positive momentum against the USD. The current quote for the instrument is 1.3656.
The statistics published in the morning showed that the CPI in the United Kingdom was 0.6% y/y in December after being 0.3% y/y in the previous month and against the expected reading of 0.5% y/y. The Core CPI showed 1.4% y/y after being 1.1% y/y over the same period.
There is no threat of deflation right now and that’s good. The Bank of England, seeing the CPI becoming more active, won’t be pressured to expand the stimulus program. It’s a good signal and the regulator should be afraid that the indicator may boost – it will take care of itself later.
The RPI was 1.2% y/y in December after being 0.9% y/y the month before.
After these reports were published, sentiments in GBPUSD didn’t change – investors are still buying it.
The latest data from CFTC says that an increasing number of investors are going bull and expecting the Pound to grow and reach the highs of March 2020. Mostly, they are hedge funds, which are sure of the vaccination effectiveness in the United Kingdom that may decrease pressure on the country’s economy and financial system due to the Brexit uncertainty – it already happened anyway.