Cable has surged by over a cent to an 18-day peak of 1.9564, with EUR/GBP slumping by nearly half-a-penny to an eight-day low of 0.6790, since the 09:30GMT disclosure of above-forecast UK February inflation figures. Annualized CPI unexpectedly rose to 2.8%, from 2.7% in January. Annualized RPI spiked to 4.6%, with RPIX rising to 3.7%.
The firmer-than-expected numbers have increased the risk of the BoE MPC hiking the UK base rate by another 25bp to 5.5% as early as next month (Apr 5). Minutes from the March 7/8 MPC meeting will be published at 09:30GMT tomorrow. GBP/USD bull targets north of 1.9564 include 1.9600 and 1.9637. The latter level is a 61.8% Fibo retracement point of the fall from 1.9917 (Jan 23, 15-year high) to 1.9185 (March 5 low).
1.9530 is now a support point. Stops above 1.9530 were tripped en route to 1.9564. Lower props include 1.9505 (last Friday's top). Today's key US event risk is the 12:30GMT release of February housing starts and building permits. These are respectively forecast at 1.45 million and 1.55 million. MPC member Barker is due to speak later.
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