Pound Dips Despite Positive Data
UK CBI industrial orders index beat expectations and also printed the strongest reading since 1977, and export orders posting the best reading since March 2019. Supply-chain difficulties and inflation remained strong. But despite the positive data result Sterling struggled to make any headway, especially with further doubts that the Bank of England would discuss dealing with rising inflation on Thursday. The Pound dipped to lows below 1.3650 to the dollar and the Euro strengthened to near 1.1630.
The latest Yougov long-term inflation survey recorded an increase in 5-10-year annual inflation expectations to 3.8%, adding that this could keep rising. Higher inflation expectations could push the central bank towards policy tightening, and the Pound should benefit when discussed.
Despite equity-market gains, Sterling opens near 1.3650 against the dollar with the Euro around 1.1650.