GBP/USD Trades to 2017 High on Inflation Surge, JPM Calls Out Bitcoin

Highlights:

  • BoE focus intensifies on boost in inflation y/y as wages remain stagnant
  • Dollar rebounds, but lacks violent recovery rally as fixed income is showing hope for optimists
  • OPEC said to discuss rolling production curbs into H2 2018
  • JPMorgan CEO Jamie Dimon calls Bitcoin ‘a fraud,’ and ‘won’t end well
  • Sentiment HighlightNZD/USD sees 67% increase w/w in net-long positions, contrarian bearish

GBP has been hot. Earlier today, GBP/USD traded as high as +1% from yesterday’s close. Over the last five days, GBP/JPY has moved higher by 3.15%. Tuesday brought about an inflation reading in the UK that likely confirmed what the Bank of England has been fearing. Consumer Price Index Data pushed higher market expectations that the Bank of England will have its hand forced by the market to hike rates.

The Bank of England meets this week and will announce a rate decision on Thursday. What seems most likely is a hold on rates with a warning from Mark Carney that the Bank of England may be forced to raise rates as 3-month average wages have been falling. The problem is that wages are falling while inflation readings like CPI and the Retail Price

Article source: https://www.dailyfx.com/forex/fundamental/article/drivers_of_price_action/2017/09/12/Closing-Bell-Sep-12-TY.html?DFXfeeds=forex:fundamental:article:drivers_of_price_action