Market participants' attention today will be riveted mainly on February statistics for consumer price indexes in the UK and USA.
Consumer price index measures changes in the price of the consumer basket of goods and services and serves as the key inflation indicator. This index still represents a major problem for most developed economies and is a major deterrent to raising interest rates in the USA and Great Britain. Both countries’ consumer price indexes are currently low, which puts pressure on the manufacturing industry. What's more, no progress is expected in the shortest time. Thus, according to Fed officials, the key inflation level of 2.0% may be reached in the USA in the medium term only.
According to forecasts, UK consumer price index will grow slightly from -0.9% to 0,1% month-on-month in February but decrease from 0,3% to 0,1% year-on-year, which will bring the UK economy nearer to the edge of deflation and put pressure on the pound. The same forecast applies to the USA. Inflation is expected to increase from -0,7% to 0,2% month-on-month in February, but the year-on-year value will remain at the same level of -0,1%.
The whole of fundamental factors allows us to expect slight appreciation of the dollar against the pound. In particular, GBP/USD quotes may drop to the levels 1.4880 and 1.4780. In case the forecasts do not prove to be correct, an upward movement to about 1.5050 is also possible.