Good morning, please see today’s entry to our Daily FX Market Commentary.
Yesterday was a very quiet day as far as GBPUSD movements are concerned, with only very minor changes to the value from the start to the finish of the day.
And this morning, the tragic news of attacks on Belgian airport Zaventem (Brussels) has sent shock waves again throughout the world. The economic impact of this shock wave has so far seen a knee jerk flight to safety from investors, and that has meant away from the GBP with haste.
The GBPUSD has so far lost over a cent against the USD, shifting from 1.4394 all the way down to 1.4270 and falling.
Our thoughts are with the victims of this atrocity. More news is expected from the scene during the day.
In the same way as the flight to safety has affected the GBPUSD, so too has it similarly affected the GBPEUR. The GBP has lost considerable ground, from 1.2790 to 1.2730 and wavering also.
Some market data is available today and, once the overshadowing news received for the Europeans this morning is not as raw, I am certain that the record keepers will reflect that the data was positive for both the German economy and the Eurozone as a whole.
I expect that the news today will continue to drive investors safety bound, but the effect of this on the EUR will not be anything like as strong as on the USD.
A day of considerable economic data for the GBP as we later expect a slew of inflation data: Retail Prices, Producer Prices, Consumer Prices. Of course, the inflation figure is vital to see how well the government measures to increase spending have worked. It is vital to see how the economy is spending and how this puts pressure on prices – and to compare this with the wage growth produced recently….and finally, it all leads to being vital to assess whether or not the UK would need an interest rate rise in the foreseeable future.
Anything that is produced as a higher figure, is a Pound positive indication.