Yesterdays US inflation numbers came in slightly better than expected. Analysts were predicting 8.7% year on year growth and the numbers cam in at 8.5%. This saw an immediate weakening of the Dollar versus both the Pound and the Euro as it could put a slight curb on the FED raising interest rates.
It must be noted that GBP/USD rates still remain relatively low, but it looks like the Dollar has started to retrace for now.
GBP/EUR rates remain in a sideways channel with little on the table to make rates break one side or the other until a raft of UK based data out at breakfast tomorrow. Star of the show will be the preliminary GDP number where analysts are expecting a quarter on quarter contraction of -0.2%. That's close to zero, so even a modest positive number could be very good for the Pound.
Business headlines are equally subdued this morning as the country seems to be taking another pause on the back of another heatwave.
Today’s Economic Calendar
US: 13:30 Initial Jobless Claims
UK: Friday 07:00 Preliminary GDP Numbers
UK: Friday 07:00 Industrial and Manufacturing Production
As ever we look forward to keeping you in the loop and look out for our next update.
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