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UK CPI to provide yet another rate re-think? – SG

FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Research at Societe Generale anticipates UK CPI data to likely show a positive bounce in inflation.

Key Quotes

“UK CPI data are likely to show a bounce in inflation to 1.4% from 1.2%, the core rising to 1.7% from 1.5% as transport costs rebounded.”

“This is pretty meaningless but short sterling futures have rallied too far, and could fall as the market prices rate hikes a bit earlier in 2015. GBP/USD could get some temporary support too. Meaningful resistance is at 1.59.”

“Yves Mersch was talking about the possibility of further ECB easing yesterday, but EUR/USD has held within the current rage and this morning’s data - the ZEW index–is expected to post a bounce that probably keeps us in this range."

"The ECB’s effective Euro exchange rate index is at 0.9970 and needs to break 0.99 to reignite the move lower. Sell a clear break of EUR/USD 1.24, or stay short and be patient as long as 1.26 holds.”

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