Good morning, please see today’s entry to our Daily FX Market Commentary.
For the second day in a row the GBPUSD hasn’t leaped about, but rather gently (and steadily) moved in one direction. And that direction favoured the USD.
Retail Sales for the States were better than predicted and this is a positive sign, of course. More people buying things can mean the prices might rise, which means wages and interest rates could follow….but it is a drop in ocean and by itself didn’t move the market a great deal.
Opening at 1.4250 and heading steadily downwards to 1.4115 as I write at the moment.
On the horizon today we have a pretty big day as far as information goes.
1. Inflation for the States. Higher the better, though the forecast is to shrink (if it does or comes in lower than expected, I say we see a downturn until…)
2. The Federal Reserve interest rate decision. Will they move any further? My personal opinion is ‘no’. What they say is as important as what they do (maybe more so if there is no movement in the rate)
I think the GBP could take advantage today and tonight.
The EUR saw the same trend as yesterday and very similar to the USD only less pronounced. A very slight change on the day with the EUR just getting the better of the GBP. The Eurozone’s employment change showed a positive figure vs expectations but much of the status quo remained from last week.
There is a meeting this morning of the European Central Bank that is not concerned with monetary policy but this is unlikely to have much more impact on the FX rates for now.
The EUR may continue to see reactions to oil prices during the day.
First up today we have UK Jobs data, unemployment and wage information and the like. This is normally very important to give indicators on how ready we are to raise interest rates. If inflation or wages are up that’s good for us, if unemployment is down, that is also good.
Budget day for the UK! That seems to have arrived again quickly.
A very brief outline is:
1. We probably will see more spending cuts from the government
2. Except for in some preplanned infrastructure spending
Perhaps there will be more hikes in alcohol and tobacco and we might even see some changes to income taxes. What is certain is the politicians will be yelling and moaning at each other in their annual shameful display…