When is UK CPI and how could affect GBP/USD?

UK Jan CPI Overview

The UK docket has the CPI report, which will be published later this session at 9.30GMT. The consumer prices in the British economy are expected to tick 1.9% higher in January y/y, after having booked a 1.6% reading in December. While core figures, excluding volatile food and fuel costs, are also expected to accelerate 1.8% in the reported month versus 1.6% previous.

On monthly basis, the consumer prices are expected to fall sharply to -0.5% in Jan versus 0.5% last.

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 60 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 75 pips.

How could affect GBP/USD?

On a better CPI print, we could cable extending its rebound towards 1.26 handle. On the other hand, should the data disappoint on yearly basis, we could see the GBP/USD pair retesting yesterday’s low near 1.2480 region.

The reaction on the data may remain limited as the sentiment around the greenback continues to drive the fx market heading into the Fed Chair Yellen’s testimony.

Key notes

UK focus: Rising CPI could weigh on UK retailers

On Tuesday 14th February the Office for National Statistics is scheduled to release UK CPI data for January. The market expects the annual rate to rise to 1.9%, just shy of the Bank of England’s 2% inflation target.

About UK CPI

The Consumer Price Index released by the 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 purchase 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).