UK CPI in focus

18 October, 2016

Sterling/Dollar staged an incredible rebound during early trading on Tuesday with prices lurching towards 1.2270 and this has nothing to do with an improved sentiment towards the Pound but Dollar weakness. With the Sterling repeatedly crashing to new lows amid the hard Brexit fears, the technical bounce displayed should be of no surprise and may even offer an opportunity for bears to install another round of selling. The persistent media reports of disagreements between the Chancellor and his cabinet over the Brexit scenario has sparked discussions of political risk while uncertainty over the health of the UK economy after the article 50 is triggered continues to weigh on sentiment.

Investors may direct their attention towards the inflation report for September which is expected to rise to a near two year high as a weaker pound post-Brexit bolsters import costs. In normal circumstances a healthy rise in inflation would be warmly welcomed with sentiment towards the UK economy receiving a welcome boost. It must be kept in mind that the Brexit fueled Sterling crash has not made these normal circumstances with fears already mounting over inflation reaching 2.6% in 2017. The GBPUSD could still be exposed to further punishment moving forward as the terrible cocktail of hard Brexit jitters, uncertainty, and rising Fed rate hike expectations entice sellers to attack.


Source link  
More bad news for Sterling as EURGBP

Backlash - that would be the word used to sum up the investor reaction from the latest attempt by UK Prime Minister Theresa May to push forward her...

EURJPY sinks to flash crash levels

A wave of risk aversion engulfed global equity and foreign exchange markets on Thursday after Donald Trump accused China of breaking...

US corporate earnings to drive global stock markets

Asian stocks, excluding Japan, are mixed on Monday, even after US stocks posted new record highs following the United States GDP report released at...


Mixed US corporate earnings reaction

Asian equities fluctuated mostly into the red on Friday, following the trend seen in their US counterparts on Thursday. As the latest US corporate earnings...

Brexit stalemate deepens

The drama, confusion and sheer uncertainty over Brexit intensified yesterday evening, after British MPs rejected all eight options aimed at...

Brexit chaos deepens

The British Pound fell yesterday afternoon, after the House of Commons Speaker John Bercow essentially banned Theresa May's Brexit deal from getting a third vote.


Rand gains on GDP but outlook clouded

Buying sentiment towards Rand has unexpectedly brightened today after official reports showed South Africa's economic growth cooled during...

US-China trade deal, ECB meeting and NFP

Asian equity markets entered the trading week on a front foot, following news that the United States and China were close to a breakthrough deal that...

Fed patience adds to the Dollar woes

Will the Federal Reserve raise interest rates at all in 2019? This was a question even Fed officials were unable to answer, as the minutes from the FOMC’s January policy meeting revealed.

  


Share it on:   or