GBP/EUR and GBP/USD rates are finally recovering slightly from the lows. This is despite rather poor GDP data out yesterday and an unexpected increase in the number of unemployed reported at breakfast this morning. Analysts were expecting the unemployment number to drop by 9,200 but it actually increased by 6,000.
If GBP/EUR follows the mid term trend it would appear more likely from here that the rate will continue to improve, and with political uncertainty put to bed for the time being this supports the argument. The UK interest rate decision has also been postponed until 22nd September in light of recent events so things could be more stable in the very short term. Inflation figures from the UK out tomorrow might be the only swaying factor. Analysts predicting 10.2% growth year on year which is still way above average earnings growth. Maybe the promised energy price cap will have some bearing on this rampant number.
Later today there's the US's inflation numbers out where economists think there will be 8.1% year on year growth, but we think it's fair to say that breakfast tomorrow might be the most eyed data.
Today’s Economic Calendar
EUR: 10:00 ZEW Survey Economic Sentiment
US: 13:30 Inflation Data
UK: Wednesday 07:00 Inflation Data
As ever we look forward to keeping you in the loop and look out for our next update.
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