The GBP/EUR rate continues to track sideways towards the top of the recent mid term range, but doesn't look poised for too much of a break either way at the stage. Any positive move could be being hampered by reality. Unemployment came in this morning in line with expectation as did average earnings. However the average earnings growth is well below the rate of inflation meaning everything is becoming that bit more expensive.
Regarding inflation, eyes will certainly be on the US this afternoon as they release their inflation numbers. Analysts are predicting another whopping 6.6% increase year on year....and that's excluding food and energy. Mind you that's a smaller number than the German inflation that came in at 7.6% year on year growth this morning.
However that, in turn, will also put pressure on the FED to continue increasing their interest rate which is helping to bolster the strength of the Dollar.
GBP/AUD and GBP/CAD appear to have bottomed out for now and the Pound is starting to gain a little strength versus those currencies.
As ever we look forward to keeping you in the loop and look out for our next update.
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Today’s Economic Calendar
US: 13:30 Inflation Numbers
CHN: Wednesday 03:00 Import Data
UK: Wednesday 07:00 Inflation Numbers (6.7% Growth Predicted)
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