Fundamental Comment

Pound Sterling jumps after UK inflation data

Pound Sterling jumps after UK inflation data

The British pound rose against the dollar on Wednesday, marking its highest level since the beginning of the week, after the release of a number of data from the British economy and as the dollar weakened. 

The pound sterling against the dollar hit its highest level at 1.3063 after it opened trading today at the level of 1.2928, augmenting 0.84%.

The British economy announced an increase in inflation rates during the month of September by 0.4%, after a previous decline of 0.4%, while the annual index rose by 0.5% from a previous increase of 0.2%.

Also, retail prices rose in Britain to record 0.3% in September from a previous decline of 0.3%, while the annual index rose by 1.1% from 0.5%.

Official figures on Wednesday showed that the British government borrowing in the first half of the fiscal year is six times higher than it was before the Coronavirus pandemic, raising public debt to its highest levels since 1960.

The total public borrowing in September alone amounted to 36.101 billion pounds ($46.90 billion), exceeding expectations, despite the revision of August figures to decrease by more than five billion pounds to 30.113 billion pounds.

On the other hand, the dollar touched its lowest level in a month on Wednesday, as investors’ optimism about the US stimulus package ahead of the election boosted demand on riskier currencies, while a strong recovery in the Chinese economy helped push the yuan to its highest level in two years.

President Donald Trump raised hopes for a stimulus agreement after he said he was ready to accept a higher aid bill despite his Republican party's opposition.

As for the dollar index, which measures the performance of the federal currency against a basket of major currencies, it recorded its lowest level in a month at 92.75, while the index opened today's session at the level of 93.70. 

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