Cable is currently trading at 1.411 in the wake of the Federal Open Market Committee’s minutes while down some 0.47% on the day having moved from a high of 1.4200 to a low of 1.4100. The Fed minutes revealed that there are possibilities for modifications to the pace of purchases if the economy continues to make quick progress towards the Committee’s goals.
Officials saw taper talk starting at forthcoming meetings but note that the economy remains far from its goals. Nevertheless, it was a hawkish enough set of minutes to support a bid in the greenback and send US yields higher.
The dollar Index rallied to 90.134 and be 0.38% up on the day, way off the lows of 89.688. The 10-year yield is 2.61% higher after reaching a high of 1.6810%. Previously in the day, the pound was already hit its lowest in more than a week against the euro after data showed a doubling of consumer price inflation in Britain in April.
The British consumer prices rose by 1.5% in April, the Office for National Statistics said, following a 0.7% rise in March vs an increase of 1.4% expected.
”The Bank of England says inflation in Britain is heading above its 2% target and will hit 2.5% at the end of 2021 thanks to a rise in global oil prices and the expiry in September of COVID-19 emergency cuts to value-added tax in the hospitality sector, as well as comparisons with the pandemic slump of 2020,” Reuters reported following the data releases noting that the tapering of the BoE’s asset purchase program has helped the pound gain relative to its peers in the G10 group of currencies.
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