The UK November CPIs Overview
The cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0930 GMT. The headline CPI inflation is expected to accelerate to 0.2% inter-month in November while the annualized figure is seen ticking a tad lower to 2.3%. The core inflation rate that excludes volatile food and energy items is expected to have softened to 1.8% last month.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.
How could it affect GBP/USD?
Upbeat UK CPI figures are likely to offer a fresh lift to the GBP bulls, that could help the rates retest 1.2700/06 (round number/ Dec 18 high), above which the next upside targets lie at 1.2752/60 (daily R2/ Dec 10 high) and 1.2812 (50-DMA).
On a negative surprise, the GBP/USD pair could fall back to the 5 and 10-DMA confluence near 1.2620 region below which floors open up for a test of 1.2589 (Dec 17 low) and 1.2550 (psychological levels).
About the UK CPI
The Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).
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.