UK Inflation Comes in Lower than Expected While Pound to USD Rate Weakens

There was little support for the Pound on Wednesday after the news emerged that domestic inflation had not increased at the rate expected.

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This left investors disappointed and meant that much of the focus was then turned to the continuation of the pandemic roadmap and the reopening of the economy. This meant that the currency finished the day at 1.1573 against the Euro and 1.3928 against the US Dollar according to the Foreign Exchange Market.

There was no directional bias pushing the Euro in any particular direction yesterday as investors showed reluctance in making any aggressive moves on the single currency before the release of the rate decision from the European Central Bank. While no policy changes are expected this month, it is likely that coronavirus developments are going to place pressure on the single currency.

The US Dollar edged higher yesterday as the market mood was cautious while an increase in US Treasury yields also helped to enhance demand for the safe-haven currency. The rise in global cases of coronavirus was a concern for investors although the jobless claims figures this week is likely to influence the direction of the US Dollar.

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