UK inflation in focus

The week started quietly on the currency markets yesterday, with no critical data out to trouble analysts and as a result recent trends remained firmly entrenched, which meant pressure on the Pound, a strong Dollar and a Euro more than holding its own.

Today is a very different day with plenty of important data due out to keep anyone with an upcoming currency requirement firmly on their toes. German inflation numbers have already been released and were as expected with CPI at 0.3% for the year, and the Euro has slightly weakened as a result.

Later this morning we have UK retail sales figures, UK Producer Price Index numbers, UK CPI inflation, European CPI inflation and both German and European ZEW economic sentiment surveys. Governor of the Bank of England; Mark Carney, is speaking at 11am, and we can expect some immediate response to the UK inflation numbers, which as ever will be minutely inspected to see if they give any change in the interest rate outlook for the UK.

Expectations are for hikes in UK interest rates later this year or maybe into 2017, but this could quickly change if inflation rises higher than expectations. While this is unlikely, especially given the oil price, it is possible that a slight change to the expectations could produce a short term spike in Sterling strength, so watch out at 9.30 this morning.

As ever stay in close contact with your Currency Index account manager to be kept informed of exactly what is happening and what this critical data is doing to the markets and hence what effect it is having on your upcoming currency purchase.