Good morning, please see today’s entry to our Daily FX Market Commentary.
There has already been a bit of a spike in the GBPUSD this morning, but ultimately the rate is still showing some very weak GBP value.
We have been as low as 1.3843 and then briefly saw a surge to 1.3910 before sharply dropping away again. At the time of writing the rate is already back down to 1.3870.
However, Chinese stocks will weigh on the USD on one hand. Crude has seen a spike on the other, so today I would expect some steady continuation of risk averse investment in the USD and a continued anti GBP trend.
The EUR is trading erratically this morning but no clear path is clear for the direction of the GBPEUR. We reached a low of 1.2667 and pushed up to the 1.2700 mark and currently sit around here.
I think the data we are set to receive today in the Consumer Price Index (a measure of inflation) will be critical in setting the path of action for the European Central Bank. Expect the rate today to be volatile after this announcement. The figure is forecast to show shrinking inflation which puts real pressure on the EUR in the next few months.
Only some ‘second tier’ data is on the cards today for the UK. Consumer credit is a measure of how much has been borrowed by people in the last month, forecast for an increase. This is coupled with a predicted increase in the number of mortgage approvals.
Taking a broad view, I think that the GBP could recover some ground on a potentially rocky day against the EUR but lose some ground against the USD still.