Pound Falls as UK Inflation Holds at 3.8%; Gold Slides
Forex Today: UK Inflation Holds at 3.8%, Pound Slips as Metals and Stocks Diverge
The British Pound fell in early London trading after UK inflation data came in softer than expected, dampening investor expectations for future rate hikes.
The UK Consumer Price Index (CPI) was forecast to rise from 3.8% to 4%, marking what would have been a 21-month high. However, the data surprised markets by remaining unchanged at an annual rate of 3.8%, prompting a swift sell-off in the GBP/USD, which dropped about 30 pips on the release.
Gold and Silver Retreat Sharply
Precious metals experienced one of their most volatile sessions in years. Gold fell more than 6%, marking its steepest daily drop in over six years, while Silver also tumbled amid a spike in volatility that likely forced many long traders out of their positions.
Although both metals have since found some short-term support, analysts warn the long-term bullish run may have peaked — especially for Gold and Silver. Platinum, however, has shown signs of stabilization.
Stock Markets Stay Bullish on Earnings Optimism
In contrast to the turbulence in metals, U.S. stock indices remain robust. The NASDAQ 100 is nearing its all-time high, while the S&P 500 continues its steady climb. About 85% of companies that have reported Q3 earnings have beaten consensus estimates, fueling risk appetite.
Adding to the optimism, President Donald Trump reiterated the potential for a U.S.–China trade deal, though he warned of possible tariffs of 155% on Chinese imports starting November 1 if talks falter.
Forex Market Highlights
In the currency market, the New Zealand Dollar (NZD) leads the majors since the Tokyo open, while the Japanese Yen (JPY) remains the weakest. USD/JPY continues to trade bullishly above its key support at ¥151.64, triggering momentum-driven buying interest among trend-following funds.
Elsewhere, WTI Crude Oil prices surged as Trump discussed a potential U.S.–India trade deal, which could redirect Indian crude purchases from Russia to the U.S.
Asia-Pacific and Canadian Data
Japan’s new Prime Minister confirmed there will be no early election, pledging instead to focus on a large-scale stimulus package to combat inflation — a move seen as potentially bearish for the Yen, though market reaction was muted.
Meanwhile, Canadian CPI data came in hotter than expected, rising 0.1% month-on-month versus expectations for a 0.1% decline, briefly lifting the Canadian Dollar (CAD).
