I don't think I was the only one somewhat surprised by the higher readings and in these thin/desperate for scraps markets the pound has understandably had a decent rally
Cable has found good demand to post 1.5677 so far just ahead of the strong res/offers into 1.5700 that I've mentioned a few times and we all know about by now
I remain unconvinced that this latest data will give the BOE a great deal of comfort. 10p on a basket of goods bought for £100 a year ago is hardly encouraging but admittedly the core CPI jump to +1.2% has given the bulls a good reason to feel happy
The ONS cited a smaller fall in clothing prices on the month compared with a year ago as being the main contributor to the rise in inflation, and we wait to see how that shakes itself out next time. We know we still have underlying softer food and fuel prices
A relief rally on the data not being as bad as feared is totally in the realms of understandable price action.
I'm not myopic or in denial and I'm currently square on cable, having followed my own advice and waited to see if we got the second wave of buying before selling into 1.5650
And I'm in no rush to sell at 1.5670 but I will, though, get short around 1.5700 and see what happens.
For those who missed it in my original post here's the link to the full ONS release