Inflation readings from the US and UK

The annual rate of UK inflation rate fell more than expected in Julyas the cost of clothing, footwear, food and non-alcoholic drinks eased off. The Office for National Statistics (ONS) said Consumer Price Index (CPI) inflation fell to 1.6% from 1.9% a month earlier. CPI remains well above average wages which grew by just 0.6% in the three months to June.Sterling dropped off against all major counterparties when this news was released which continues the trend of any consensus figures missed tends to devalue the currency. Particularly cable suffered on the back of softer-than-expected CPI figures, which reaffirmed BoE dovish stance, the pairing fell to a 4-month low (April 14) to 1.6607.Yesterday morning sterling finally was trading at resistance levels on the euro peaking to 1.25 however, similar moves to cable,the currency decreased in value to 1.2452 when Inflation readings were released.It means the Bank of England remains under little pressure to raise interest rates in order to keep inflation at or below its target rate of 2%.Today could lead to be another busy day with the MPC rate decision later this morning.

There was nothing to report from the 27 nation economy yesterday and today will echo that with no fundamental data being released until Thursday when we will witness readings from Manufacturing PMI and Consumer Confidence.EUR/USD is currently stuck in the mud trading in a very tight range only moving 50 pips yesterday closing the London session out at 1.3317 and opened this morning on 1.33 the figure.

Consumer prices in the United States rose a bare 0.1% in July despite strong gains in food costs, the country’s Labour Department has reported. The slowdown in consumer inflation after three months of faster gains left the year-on-year consumer price index up 2%, a level the Federal Reserve's monetary policy makers have regarded as non-threatening.Food prices were up 0.4% in the month, continuing a high pace of increases since February which are hitting American shoppers in the wallet. Food costs were 2.5% higher benchmarking from this time last year.Expect some volatility in overnight trading as we have the FOMC minutes later this evening which will gear the markets towards Fridays Jackson Hole Symposium which is considered to be very high impact as it is a forum for central bankers, policy experts and academics to come together to focus on discussing various economic topics.