Confused by the inflation news - effect on Forex?

H

hanneswas

The new inflation news from BoE on the GBP stated that the inflation will be higher.
I would have expected the GBP to go down. Instead, GBP/USD runs up.
Screenshot from 2021-10-20 18-32-28.png

Is this only because USD is going down?

Would really appreciate any reasonable explanations on the current movements.

Thank you very much!
 
Why are you trading on the news? Chart of GBP/USD has strong upside momentum. "It's not possible to react to your way to investment success." (can't remember who said that, but relevant quote)
 
hanneswas said:
The new inflation news from BoE on the GBP stated that the inflation will be higher.
I would have expected the GBP to go down. Instead, GBP/USD runs up.
View attachment 269709

Is this only because USD is going down?

Would really appreciate any reasonable explanations on the current movements.

Thank you very much!
More...
BoE stated they may raise rates soon, which would be before the Fed and ECB. FX trades on rate differentials and trends towards long term ppp equilibrium (law of one price).
 
longandshort said:
BoE stated they may raise rates soon, which would be before the Fed and ECB. FX trades on rate differentials and trends towards long term ppp equilibrium (law of one price).
More...
All right, that may explain the strong up move.
Thank you!
 
formikatrading said:
Why are you trading on the news? Chart of GBP/USD has strong upside momentum. "It's not possible to react to your way to investment success." (can't remember who said that, but relevant quote)
More...
I am not really trading the news. I have a short position on Gbpusd and would like it to go down. :)
 
longandshort said:
BoE stated they may raise rates soon, which would be before the Fed and ECB. FX trades on rate differentials and trends towards long term ppp equilibrium (law of one price).
More...
If BoE raises the rated to 1.2%,
How much movement may we expect if USD is still on 0.1?
 
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