Around 12:10 p.m., the British currency rose by 0.27% against the euro, to 83.32 pence, as well as against the franc or the yen.
The pound rose on Wednesday after the surge in inflation in the United Kingdom, which exceeds the Bank of England’s (BoE) target and could lead it to moderate its rate cuts, but remains in decline against a conquering dollar .
Around 12:10 p.m., the British currency rose by 0.27% against the euro, to 83.32 pence, as well as against the franc or the yen.
British inflation started to rise again in October, to 2.3% over one year, after reaching a three-year low in September, 1.7%.
Higher than the BoE’s 2% target and economists’ expectations, this indicator is driven by the rise in energy prices which is worrying the poorest households before winter.
Core inflation, which excludes products with the most volatile prices such as energy and food, also increased in October, which “underlines the continued pressures on prices in the services sector”, particularly scrutinized by the BoE, according to Daniela Sabin Hathorn, analyst at Capital.com.
The probability of a rate cut at the next meeting of the monetary institution on December 19 decreased slightly after this publication, although the market had already been positioning itself for some time in favor of a pause, according to the analyst.
The British currency, however, lost 0.17% against the greenback, to 1.2660 dollars.
Boosted by the election of Donald Trump, which augurs a slowdown in the reduction of Federal Reserve (Fed) rates, the dollar is also supported by the geopolitical situation.
Russia on Tuesday promised an “appropriate” response to the attack on its territory by Ukraine on the night of Monday to Tuesday with American ATACMS missiles. Believing that the conflict is moving into “a new phase”, Moscow announced on Tuesday that it was expanding its possibilities of using nuclear weapons.
The rise in these tensions benefits safe haven values, “which pushed an already strengthened dollar upwards,” adds Daniela Sabin Hathorn.
Also driven by the “Trump effect”, bitcoin remains in the green on Wednesday, after reaching a new historic price the day before, at $94,031.53.
Given the strong and rapid increase in the price of this cryptocurrency since November 5 and the American presidential election, “it is possible that bitcoin will pause in its rise this week and that the price will consolidate, or even retract momentarily,” estimates Simon Peters, analyst at eToro.
