The week continues with a relatively quiet start, but key economic data and political developments are set to influence markets in the coming days. Here’s what to watch.
US Producer Price Index (PPI) in Focus
This afternoon, the US Producer Price Index (PPI) is due for release, with forecasts predicting a year-on-year rise to 3.4%, up from 3%. A stronger-than-expected reading could bolster the US dollar further, as it would reflect increasing inflationary pressures, potentially shaping future Federal Reserve policy.
Key Political Week for the UK
In the UK, this is a pivotal week for Chancellor of the Exchequer Rachel Reeves, as she prepares to face scrutiny during Prime Minister’s Questions in Parliament tomorrow. The debate will likely focus on government debt and plans to address it, with options including:
- Tax increases.
- Reduced government spending.
Labour leader Keir Starmer has hinted at a determined approach to cutting public expenditure, adding political weight to the week’s economic discussions.
UK Economic Data: CPI, GDP, and Retail Sales
On the data front, the UK Consumer Price Index (CPI) is scheduled for release tomorrow morning, with forecasts suggesting inflation will hold steady at 2.6%. Later this week, additional key metrics, including Gross Domestic Product (GDP) figures and Retail Sales, will provide further insights into the UK economy’s health.
Currency Markets: Pound’s Mixed Performance
The pound remains under pressure, continuing its downward trend against major currencies. However, there are early signs of recovery today, with the pound gaining:
- 40 points against the dollar.
- 10 points against the euro.
This mixed performance reflects ongoing volatility in the foreign exchange markets, as traders assess political and economic developments.
How Could This Impact Your Business?
With significant data releases and political events on the horizon, currency markets are poised for potential volatility. Businesses should take proactive measures to hedge against risks and optimise their international transactions.
Contact Qumoney’s experts today for bespoke strategies to navigate these uncertain times and capitalise on market opportunities.