Forex: Sterling reaches 14 month high on strong inflationary data

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The Sterling today gained to reach a new 14 month high of 1.6400 in mid European session further to a weakening US Dollar and hawkish inflationary data from the UK in which the Public Sector Net Borrowing for February came out at 10.28 Billion, well above the expected value of 5.7 Billion.

 

The GBPUSD inclined by some 90+ pips on the day from an Asian session open of 1.6308 and has stayed firm at its heightened levels that were reached towards the end of the European session as the pair continues to currently trade around the 1.6378 levels, with oscillations of +/-15 pips.

 

The better than expected inflationary data saw investors anticipating a sooner than expected interest rate hike by the Bank of England and as a result prompted long positions in the GBP. Tomorrow’s Bank of England minutes may see the Sterling convincingly break past the 1.6400 level and some expect it to reach as high as 1.6500, should the minutes show a hawkish bias by the policymakers.