The rise in inflation, which surpassed all forecasts, pushed the pound to new heights. Inflation accelerated from 2.6% to 2.9%, going beyond the forecast of 2.8%. Now, the market is waiting with enthusiasm for tomorrow's meeting of the Bank of England. And although the probability of an increase in the refinancing rate is extremely small, the number of supporters of such a step may increase. If three or more votes are given to raising rates, then the Bank of England may actually raise it in the near future. With the current inflation, leaving the rate at 0.25% is not even just strange, but risky. The dollar was not even helped by the data on open vacancies, which increased from 6,116 thousand to 6,170 thousand. However, they predicted reduction.
Today, the pound may continue to grow, as fairly good data on the labor market are expected. The unemployment rate itself should remain unchanged and the number of applications for unemployment benefits may increase by 0.6 thousand. However, it is predicted that wages will grow both with and without premiums. And with premiums, growth should be stronger. The euro will also have a small reason to increase with the growth rate of industrial production expected to accelerate from 2.6% to 3.4%.
However, by the evening, the dollar will have the opportunity to improve its position thanks to data on producer prices. The rate of their growth should accelerate from 1.9% to 2.5%, which means inflation. It will continue to accelerate.
The EUR/USD pair will first gradually increase in the direction of 1.2050, and then return to the level of 1.2000.
The pound is heavily overbought, and its growth potential is extremely limited. The GBP/USD pair may consolidate around 1.3325. After that, it will gradually decrease in the direction of 1.3285.
