The British pound is the best performing G10 currency today. Currency gained against most of its peers following release of the CPI inflation data for August. Report showed price growth accelerating from 2.0% YoY to 3.2% YoY! Market was expecting an acceleration to 2.9% YoY. Core CPI increased from 1.9% YoY to 3.1% YoY (exp. 2.9% YoY). In case of the headline reading, it was the highest print since March 2012. The Bank of England has been quite hawkish in its messages recently but just like other central banks, it keeps insisting that inflation is temporary. However, the inflation spike in August may force central bankers to tighten policy faster. Market currently prices in 2 rate hikes in 2022 with the first full rate hike being priced in for March 2022.
Taking a look at GBPUSD chart, we can see that the pair has managed to break above the 200-hour moving average (purple line) following release of the UK CPI data for August. However, advance was halted later on by the 50-hour moving average (green line) and the pair pulled back slightly. Nevertheless the pair has been trading in the uptrend since late-August and so far the uptrend structure has been left intact.