Daily Market Diary

For GBP or Pound

In October, the UK CPI rose 4.2%, exceeding expectations of 3.9%. Monthly CPI was 1.1%, exceeding October's 0.8% prediction.

September's 12-month rate was 3.1% and monthly rate 0.3%.

The Office of National Statistics reported that housing and household services contributed 1.23 percentage points to the October 2021 CPIH 12-month inflation rate, followed by transport (1.08 points) and restaurants and hotels (0.43 points).

GBP spiked this morning before retracing. The retracement failed, and the GBP rose against all major currencies except the GBP/JPY.

Cable is 10 pips from 1.35. After a 7–2 vote to keep rates unchanged earlier this month, traders appear to be pricing in a Bank of England rate hike again.

For Japanese Yen

A stronger Japanese yen was the product of a build-up of worries in financial markets on Wednesday, after U.S. tech stocks sold off the previous day and a leading coronavirus vaccine candidate faced delay.

The U.S. dollar also found some support as the stock market slide spooked investors into selling riskier currencies, while worries about the fate of Brexit talks pushed the pound down to a new six-week low.