Forex Today: UK Inflation Surprises at 3.8%

By Adam Lemon Created on October 22, 2025

The British Pound drops in early London trading as UK inflation data is surprisingly cool.

UK CPI (inflation) data was expected to show UK inflation rising from 3.8% to 4%, which would be a 21-month high, but unexpectedly it came in unchanged at an annualised rate of 3.8%. The British Pound fell, with the GBP/USD currency pair instantly falling by about 30 pips.
Precious metals remain in focus as price action suggests the amazing long-term bullish trends in Gold and Silver might well be over, evidenced by a very sharp drop yesterday and a massive surge in volatility, which will have knocked out most trend traders from their long positions in these precious metals. At one stage Gold was down by more than 6%, which is its strongest daily fall in over 6 years. In the past few hours, Gold and Silver have found some support, with Gold looking more bullish than Silver. Platinum has also found support. It may be that we have now seen long-term highs in these precious metals, especially in Gold and Silver, that will not be surpassed for quite a while.
Stock markets continue to look bullish, notably in the USA, with the tech-based NASDAQ 100 Index getting very close to its all-time high, and the S&P 500 Index also not far off. There are strong trends at work here, but analysts tend to attribute the latest boost to increasing optimism over American corporate earnings this season, with about 85% of S&P 500 Index members who have already reported earnings coming in above consensus expectations. Another factor helping markets is that President Trump is continuing to talk up the prospect of a deal with China over trade with more remarks yesterday, although he also mentioned a worst-case scenario where tariffs of 155% would be paid on Chinese imports into the USA starting on 1^st November, which is only 9 days away.
In the Forex market, the New Zealand Dollar has been the strongest major currency since today’s Tokyo open, while the Japanese Yen has been the weakest. The USD/JPY currency pair is in some focus after triggering a long trade entry at most trend-following funds a few days ago and is looking bullish as long as it holds up above its support level at ¥151.64.
WTI Crude Oil is firmly higher as President Trump talks up the prospect of a USA/India trade deal, which would lead to India purchasing crude oil from the USA instead of Russia (WTI comes from the USA).
Japan’s new Prime Minister has vowed to continue with a minority government (no election will be called) with the purpose of passing a huge stimulus package to combat inflationary problems in Japan. This is seen as potentially bearish for the Yen, but the Yen did not seem to be impacted by this announcement.
Canadian CPI (inflation) data released yesterday was higher than expected, showing a month-on-month increase of 0.1% while a decrease of 0.1% was widely expected. This strengthened the Loonie a bit for a while