Market insights

The Pound is looking weak right now

It looks like the tide may have turned when it comes to high inflation meaning an increase in a currencies value. High inflation indicates the possibility of a rate hike by the corresponding central bank, which, in turn, is good for the underlying currency.

However the Bank of England's Hail Mary hike of 0.5% last week may have been the turning point for the Pound.

Many countries are now showing lower than anticipated inflation numbers with Italy being the most recent. This shot across the bows by the BoE is their attempt to get the UK to follow suit next time around.

Eyes will now be firmly fixed on tomorrows GDP numbers from the UK at breakfast. Analysts are expecting quarter on quarter growth of 0.1%.....that's pretty close to the contraction line. This could be the point where the Pound reverses this short term weakness.

It's a quiet day for UK news but heavier for Euro and Dollar news. First out of the traps is consumer confidence in the Eurozone followed by German preliminary inflation numbers. Analysts there expecting annualised 6.7% growth. For the Dollar it's initial jobless claims and the start of their GDP reading where analysts are expecting annualised growth of 1.3%.

Early tomorrow is Japanese inflation for anyone following the Yen with predicted annualised growth of 3.8%.

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Economic calendar

EUR: 10:00 Consumer Confidence

GER: 13:00 Inflation Data

US: 13:30 GDP Numbers

US: 13:30 Initial Jobless Claims

JPN: Friday 00:30 Inflation Data

UK: Friday 07:00 GDP Numbers

As ever we look forward to keeping you in the loop and look out for our next update.

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