The pound has rallied since the 08:30GMT disclosure that September's annualized UK CPI came in at 2.4%. The as-forecast number underpins the expectation that the BoE MPC will hike the UK base rate by 25bp to 5.0% next month (November 9). The UK base rate was last at 5.0% in early September 2001. Sterling sated sell interest at 1.8650 following the CPI release, with stops above 1.8655 subsequently tripped en route to a one-week peak of 1.8682. Touted bull targets above include 1.8700, 1.8740, and 1.8775.
1.8650/55 is now a pullback support window. 1.8643 (today's Asian session peak) and 1.8612 (today"s Asian session base) are among prop points below. The as-expected UK CPI is a factor in today's EUR/GBP drop to an 11-day low of 0.6710. Stops are touted below 0.6710. More stops are tipped sub-0.6700. There are a raft of US figures due today, inclusive of September PPI at 12:30GMT, August TIC data at 13:00GMT, and September industrial production and capacity utilization at 13:15GMT. PPI is forecast down 0.7% m/m. IP is forecast down 0.1% m/m. CU is forecast at 82.2%.
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