According to analysts at TD Securities, this morning's UK data and BoE comments reinforced the market's recent dovish tone.

Key Quotes

“December CPI surprised to the downside, with headline at 1.3% y/y (mkt 1.5%), and core CPI at 1.4% y/y (mkt 1.7%). Services CPI fell to 2.1% y/y, its weakest rate in the history of the data going back to 1988. There were three prior instances of 2.1% prints, but those were all March/April readings and skewed by Easter effects. The most notable weak spot in services was in hotels, where after sharp decline in November and December, the y/y rate has swung from 4.5% y/y in October to -2.2% y/y now. While we had initially thought that the inflation data wouldn't be watched all that closely by the BoE, the weakness in the December data was significant enough to get a bit more attention than usual.”

“This morning we also heard from the BoE's Saunders, who was firmly in the dovish camp, as we would have expected after having voted for rate cuts at the last two meetings already. He has a very bearish view of the UK economy from here, and said that it would take a "big bounce" to get UK growth back to potential.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD trims intraday gains returns to mid-1.17

The EUR/USD pair retreated after flirting with the 1.1800 figure, as the market mood somehow turned sour. Focus on the next US fiscal relief package, coronavirus, and economic progress.


GBP/USD approaches 1.3000 once again

GBP/USD is easing towards weekly lows as dollar bulls are giving it another try. Brexit concerns and UK lockdowns in the eye of the storm.


XAU/USD bull-bear tug-of-war extends around $1975

XAU/USD sidelined heading into the European session. Downside limited by dollar weakness, coronavirus concerns. Focus remains on the USD dynamics and the United States/China updates.

Gold News

What you need to know about trading in August

The generally received wisdom is that summer is a quiet month for trading. Traders are on holiday and markets quieten down. That’s the expectation among many. However, the reality is that August can be one of the most volatile trading months of the year.

Read more

WTI: Bulls await API data to attack $41.00

WTI struggles to extend recovery moves from $40.74 beyond $41.00. Virus woes join OPEC output increase to combat drop in Russian oil production. US Factory Orders, API inventories will be the key.

Oil News