- Euro/GBP aims to about 0.8285 in the early European session on Wednesday.
- CPI enlargement in the United Kingdom increased to 3.0 % year on January in January, compared to 2.8 %.
- The Dovish position may withdraw from the European Central Bank less than the euro.
The EUR/GBP cross weakens approximately 0.8285 during the early European trading hours on Wednesday. Pick edges (GBP) is higher against euro (Euro) After the United Kingdom is more hot than expected Consumer price index (CPI) inflation data for January. Later on Wednesday, The euro area The current account will be released.
Data issued by the UK National Statistics Office on Wednesday showed that the country’s main consumer price index increased by 3.0 % year on year in January, compared to an increase of 2.5 % in December. This reading came in more hot than the expected 2.8 %. The basic consumer price index, which excludes the volatile prices of food and energy, increased by 3.7 % year on year in January compared to 3.2 % before, in line with the consensus of the market of 3.7 %.
Meanwhile, the monthly CPI enlargement in the UK fell to -0.1 % in January from +0.3 % in December. Expected markets read -0.3 %. The sterling pound holds a constant in an immediate reaction to the optimistic inflation data in CPI in the UK.
The slower growth in the eurozone has led to the expectations of additional interest rate discounts from the European Central Bank (ECB), which may affect the common currency. Analysts expect European Central Bank (European Central Bank) to provide a quarter of a point discounts at each meeting until mid -2015. The deposit price is 2.0 %
Common questions about inflation
Inflation measures an increase in the price of a representative basket for goods and services. The main inflation is usually expressed as a change in percentage on a month on a monthly (illiterate) basis on an annual (annual) basis. Basic inflation excludes more volatile elements such as food and fuel that can fluctuate due to geopolitical and seasonal factors. The basic inflation is the number that economists focus on and is the level targeted by central banks, which are assigned to maintaining inflation at a controlled level, and is usually about 2 %.
Consumer price index (CPI) measures changing commodity and services basket prices over a period of time. It is usually expressed as changing a percentage on a month basis on a monthly (illiterate) basis and on an annual basis (YOY). Core CPI is the number targeted by central banks as it excludes food and flying fuel inputs. When the basic consumer price index rises above 2 %, it usually leads to high interest rates and vice versa when less than 2 % is less than 2 %. Since high interest rates are positive for the currency, high inflation usually leads to a stronger currency. The opposite is true when the inflation falls.
Although it may seem intuitive, high inflation in a country pays the value of its currency and vice versa to reduce inflation. This is because the central bank usually raises interest rates to combat higher inflation, which attracts more global capital flows from investors looking for a profitable place to enter their money.
Previously, gold was the assets that converted investors into high times of inflation because they have maintained their value, and while investors are often buying gold for their safe properties in times of turmoil in the extremist market, this is not the case most of the time. This is because when inflation is high, central banks will put interest rates to combat them. The highest interest rates are negative for gold because it increases the costs of maintaining gold in assets that bear interest or placing money in the calculation of cash deposits. On the other hand, low inflation tends to be positive for gold because it leads to low interest rates, making the bright metal a more applicable investment alternative.
2025-02-19 07:18:39