Fundamental Comment

Pound extends gains after UK inflation data

Pound extends gains after UK inflation data

The British pound rose for a fourth consecutive session versus the U.S. dollar, finding support from improved inflation data in Britain during the month of October, at a time when the US dollar is witnessing a retreat against a basket of major currencies.

The pound sterling against the dollar recorded its highest level in a week during today's trading at 1.3296, after it opened trading today at the level of 1.3236, and the pair is currently trading at 1.3287.

The rise in sterling levels comes after an improvement in inflation data from the British economy. The annual consumer price index for the month of October showed an increase of 0.7% after the previous reading and expectations indicated a rise of 0.5%.

As for the annual core CPI, it increased by 1.5%, whilst expectations and the previous reading indicated a rise of 1.3%.

Statistics showed that consumers in Britain have increased their purchase rates for storage due to the lockdown restrictions imposed on the economy, which led to higher prices for food, clothes and shoes.

It is noteworthy that the British government has decided to impose closures due to the second wave of the emerging corona virus, since November 5 for a month.

The deputy of the National Statistics Center for Economic Statistics Jonathan Atho indicated that the inflation rate rose slightly with the rise in clothing prices, and a return to its normal seasonal pattern after the unrest this year.

As for the US dollar, it continued its downward movement to record a decline for a fifth consecutive session, recording its lowest level in more than a week, according to the dollar index, which measures its performance against a basket of six major currencies.

The current decline in the levels of the US dollar comes in light of the high number of people coronavirus infections, in addition to political tensions in the United States due to the refusal to hand over the presidency smoothly.

The dollar index recorded its lowest level today at 92.19 after opening today's trading at the level of 92.46.

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