Let's start with a recap of yesterdays data.
Preliminary Euro GDP data came in in line with analysts expectations meaning no shockwaves were felt.
US retail sales came in better than expected. Month on month growth was 1.7% against expectations of 1.4%. This strengthened the Dollar versus the Euro but had little effect on an already strong pound.
UK inflation numbers this morning show a 4.2% year on year growth. This is widely above the 2% target. Whilst there are mitigating factors when comparing against 12 months ago it puts further pressure on the Bank of England to increase interest rates. The theory behind this is that if interest rates go up, the cost of borrowing goes up, so we spend less. If we spend less then inflation should go down.
These numbers caused a further hike in GBP rates which have temporarily broken out of the recent technical range versus the Euro. It will be interesting to see if the breakout holds. It seems unlikely as it's more likely a bigger news story is required to firmly push the rate higher.
It's the same story versus the Canadian Dollar and the Swedish Krona. However against the Dollar things are more subdued in light of their retail figures.
Looking ahead it's another day of speeches from both the FED and the ECB so today will be about pricing in the last 24 hours data.
As ever we look forward to keeping you in the loop and look out for our next update.
Our friendly currency experts are here to assist you and guide you through the markets, we offer a first-class service and even an online platform so you can monitor your transaction in real time.
Our business ethos is based on bank beating rates and fantastic customer service, click the link below for a no obligation quotation and see the savings for yourself.
Today’s Economic Calendar
EUR: 10:00 CPI Data
US: Throughout the day FED speeches
EUR: 18:30 ECB Lagarde speech