The relatively calm start to the week in the financial markets on Monday continued into yesterday’s price movement. On the data front, the most notable release was US retail sales in June.
The big FX pairings traded in relatively tight ranges all day yesterday. One of the few visible developments was the dollar’s early marginal downward pressure.
However, the dollar rose following the announcement of retail sales data, before falling again overnight.
The pound sterling kept its recent gains as UK inflation met its target in June, leaving many unsure if the Bank of England would cut interest rates in August.
The market’s indicated expectations for a Bank of England rate drop on August 1 were split 50/50 going into today’s all-important inflation statement, and we’re no wiser as a result. This is because all three major components of the headline CPI, core CPI, and services CPI met expectations.
Later today, the final Eurozone HICP figure for June is expected to confirm inflation at 2.8% for the month. In the United States, industrial production numbers for June are due.
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