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Pound Still Pressured by Inflation Miss19 July 2018 by Dave Evans

Morning Report: 07.00 London

The British pound remains under pressure after touching its lowest levels since September 17 yesterday. With UK inflation levels falling below expectations yesterday, traders are taking bets off an August rate rise. The GBP/USD’s fall approached 1.3000 yesterday, but closed some way off the lows after a late rebound. There is follow on selling this morning, taking the GBP/USD below June’s closing low again. The GBP/JPY is lagging its peers, falling for the third straight day, while the EUR/GBP continues to rise.

By contrast, the Aussie dollar has been performing well, though the AUD/USD is some way off the highs of the morning. Aussie employment numbers came in well above estimates.

The euro is slipping lower against the dollar and yen, with the EUR/CHF unchanged after four days of losses.

The USD/JPY is slightly higher after a reversal from 113 yesterday.

Gold continues to tumble after approaching $1220 yesterday.

Coming up today

Today, we have UK retail sales at 09.30.

US Philly Fed is at 13.30, with unemployment claims at the same time.

FOMC member Quarles speaks at 14.00.

Trade Idea

The euro has lost ground to the Swiss franc of late, in-line with the wider trends from May. The euro is on the back foot after core CPI came in below estimates yesterday.

July 19th, 2018: Pound Still Pressured by Inflation Miss

Further downside could be on the cards and a good way to play this is a LOWER trade predicting that the EUR/CHF closes below 1.1600 in 14 days for a potential return of 135%.

July 19th, 2018: Pound Still Pressured by Inflation Miss