Sterling on standby ahead of inflation data

15 August, 2017

Sterling on standby ahead of inflation data

Sterling lost ground against a broadly stronger Dollar during Monday’s trading session, with prices dipping towards 1.2950, as the ongoing uncertainty surrounding Brexit weighed heavily on the currency.

Today’s main focus and event risk for the Pound, will be the highly anticipated inflation report from the United Kingdom. The report could offer some fresh clues on when the Bank of England will raise rates. Markets are expecting consumer prices in the UK to rise at an annual rate of 2.7% in July, following June’s unexpected slowdown when depressed global oil prices lowered the cost of petrol. An inflation figure that meets or exceeds the 2.7% estimate, is likely to rekindle expectations of the BoE raising rates - which will ultimately support the Pound.

Rising inflation, subdued wage growth and Brexit uncertainty, have left the BoE in a tight spot and it will be interesting to see how the central bank solves this complicated jigsaw of events. Although raising interest rates to cool inflation is seen as a practical strategy, it may end up pressuring borrowers and pinching consumers further.

The British Pound has been pressured this year by political risk and soft economic fundamentals, and may be instore for further punishment as the Brexit uncertainty persists. From a technical standpoint, the GBPUSD is coming under increasing pressure on the daily charts, with 1.3000 acting as a psychological resistance. A breakdown and daily close below 1.2950 should encourage a further depreciation towards 1.2850.


Source link  
All eyes on U.S. inflation figures

After wiping off more than $5 trillion in market cap past week and volatility hitting the roof, global equities are finally showing signs of stabilization...

Equities continue to be a mixed bag

The US equity markets were another rollercoaster for traders for the open of the week as the S&P continued to try and surge back after the recent movements from...

Equity bears take back hold

The equity bears are back in town and they most certainly have their claws out. Markets had briefly recovered and were looking upbeat for the most...


Market's wild ride not over yet

Investors across the globe are finding it difficult time currently to decide on whether to buy the recent dips, or to remain on the sidelines until the dust...

Equity markets shake of the bears

Markets have been hot and cold today as equities saw some intense volatility. For most, it was the beginning of the end at the start of the week...

Global equity markets drop sharply

Global markets were having a case of the Monday blues today as they tumbled sharply on the back of fears around global economic growth and a potential slowdown.


Markets adjusting to new reality

When markets are priced for perfection, a slight shift in sentiments causes much damage. This is what we saw last week after U.S. jobs report showed...

Markets set to focus on non-farm payroll

The market is currently taking a breather after the US data today as it's almost time for non-farm payroll. Markets previously have been surprised by the...

FOMC falls flat for market

The FOMC statement did not have the desired effect for the market today as it was rather flat for the bulls and the bears. While the FED was...

  


Share: