When is UK CPI and how could affect GBP/USD?

UK March CPI Overview

The UK docket has the CPI report, which will be published later this session at 0830GMT. The consumer prices in the British economy are expected to remain unchanged at 2.3% in March y/y. While core figures, excluding volatile food and fuel costs, are expected to come in a tad weaker at 1.9% in the reported month versus 2.0% previous.

On monthly basis, the consumer prices are expected to tick lower to 0.3% last month versus 0.7% previous.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 60 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 75 pips.

 How could affect GBP/USD?

On a positive CPI print, we could see cable break the Asian consolidation box to the upside and extend further to test 1.2450.

On the other hand, should the data disappoint on yearly basis, we could see the GBP/USD pair falling back into the red zone, and from there could accelerate declines in order to test key support near 1.2330 region.

Key notes

UK: Expect at least a temporary reprieve from the upward march in core inflation - Scotiabank

UK: Inflation likely to pull back slightly in March - TDS

About UK CPI

The Consumer Price Index released by the National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).