US equities have been trading sideways for the past three sessions and major currencies have followed suit.
Sterling was slightly on the back foot this morning but rallied back following the release of UK inflation data for January. Headline CPI inflation rose to 1.8% yoy versus a consensus forecast of 1.6% yoy. However the increase from 1.3% yoy in December was mostly due to higher fuel prices and was in line with the Bank of England’s recent forecast. Therefore today’s data probably have few immediate implications for monetary policy and the policy rate which currently stands at 0.75%. At the time of writing the GBP/USD cross is trading around 1.30 while GBP/EUR has inched higher to 1.203. Movement in the Australian and Kiwi Dollars have been equally subdued, with markets seemingly willing to discount new reports about the coronavirus.
