Tag Archives: USD

Today’s Bank of England inflation views poll will be looked at for signs that inflation expectations have weakened further. The last report three months ago reported that one-year inflation fell to 3.3%, the lowest level in two years.

The sterling market will, however, focus on next week’s BoE policy announcement (with no change in interest rates predicted) and critical UK data.

PM Sunak appeared to rule out a May general election yesterday, prompting speculation that it will be held in October or November.

Yesterday, markets were digesting the latest US macro news flow. Producer price inflation in February was more than anticipated. The headline PPI rate was 1.6% year on year. Meanwhile, retail sales in February underwhelmed, rising just 0.6% month on month.

Looking ahead to today, the macro focus will continue. The US economy, which has a number of releases scheduled. The diary will include industrial production for February, the regional Empire manufacturing survey, and consumer sentiment for March.

A quiet day for the UK in terms of economic data, therefore attention turns to the US later today.

Investors’ attention will turn to this afternoon where there is a flurry of US figures. Also, over the course of the day there are a number of ECB policymakers that may garner some market attention.

Producer Price Index and Core PPI figures in the US are both set to expand this afternoon. This

indicates that price inflation is rising and is reflecting the higher-than-expected US CPI inflation release earlier this week.

US retail sales is set to rebound in February, suggesting that the US economy is beginning to slowly improve, and that consumer spending is increasing.

There has been low volatility in the FX markets this week. GBPEUR and GBPUSD have both been trading in a tight range as markets anticipate Central Bank monetary policies decisions.

The Bank of England have remained firm on future rate cuts therefore resulting in the Pound being one of the best performing currencies in the G10 this year. Attention will turn to next week as we await UK CPI inflation figures and The BoE interest rate announcement.

According to official numbers released earlier this morning, the UK economy grew again in January.

The measure of everything generated in the UK, known as gross domestic product (GDP), increased by 0.2%, according to the Office for National Statistics.

It is the first official economic growth announcement since a recession was declared last month, following two consecutive three-month spells of negative economic growth.

Over in the U.S In the immediate aftermath of the CPI release, the dollar remained firmer. However, the dollar gave up some of its gains before the close last night. 

However, in early trading, sterling has not been impacted by the report. Later today, Eurozone industrial production figures for January will be announced. Barring any huge surprises, the data are unlikely to have an influence on currency markets.

The UK Employment figures kick off the economic calendar today. Wages are up by 6.1% in the three months to the end of January.

With wages being higher than the rate of inflation it will prove difficult to cut interest rates any time soon.

Alongside this the ILO Unemployment rate has come in at 3.9% which is higher than expected. Employment reports are closely watched by the Bank of England, as they provide key data on where the economy is fairing.

Elsewhere this morning Germany has posted its Consumer Price Index. As expected, inflation has stayed at 2.7%.

As Europe’s largest economy, this is closely watched by investors as an indicator of the current state of the economy in the Eurozone.

Later today sees attention turn to the US, with the release of the Consumer Price Index. All eyes will be focused on this, as inflation in the US is expected to fall to 3.7% (from 3.9%).

Looking ahead this week there is key data for the UK, with GDP being released tomorrow morning. Markets are expecting to see no growth month on month.

On the currency front, the pound continued to drop off yesterday after last weeks rally. The pound is currently on the back foot against both the euro and the dollar after this morning’s releases.

The start to the week is very quiet in terms of economic data with nothing to really report on today.

Focus will shift to tomorrows raft of data and more importantly the UK Employment figures.

The latest figures are likely to suggest that the jobs market still remains tight, with the unemployment rate falling to 3.8 percent in the 3 months to December period compared to 4.1 percent in the previous 3-month period to September.

For the US tomorrow, we have the Inflation figures later in the afternoon. The report will provide key data to the Federal Reserve’s decision-making process.

On Wednesday, we have the UK Growth figures & Industrial Production number due.

Lastly, markets will be particularly interested in the US Employment, PPI and Retail Sales figures on Thursday.

In terms of currency movements, the pound has begun the week down from its highs on Friday against the euro and dollar.

Hopes that the ECB and Fed will cut interest rates before the Bank of England has helped push the pound to multi-month highs against its counterparties