Focus on Inflation data this week, Has the See-saw reversed?

11 June, 2018

Matthew Boyle

This week sees the three major currencies – GBP, USD and EUR all release inflation data. As such we could be in for a bumpy ride, particularly for GBP crosses as in the last few months speculation has been rife about any further interest rate hikes in the UK, which is closely linked with this inflation figure.

A higher than expected inflation figure for the UK could see the Pound gain as this supports a raise to interest rates, however it has been dropping over the last few months, closer to the Bank of England target of 2%, so don’t be surprised if this is the case and we see GBP buying rates trickle down.

Over the last week we have seen the recent see-saw effect reversed, now the USD rates are rising whilst Euro rates against the Pound are starting to come down. Both moved by around a cent last week, and it looks like we may see a continuation of this. Having moved over 10 cents in a couple of months, this was always likely to occur as the traders take profit and the market corrects, so don’t be surprised if we see USD rates push up, that EUR rates don’t continue to drop.

Those of you with short-term EURO requirements may like to consider this and act now, particularly ahead of Wednesdays UK CPI reading as we could see rates continue to slide.

Trouble for the Pound could be compounded further on Thursday when the ECB have their press conference. Many are suggesting they will provide guidance on when they will end their Quantitative Easing programme, and if they do this could be hugely Euro positive. If they don’t we could, of course, see the Euro sold off, but either way, we are in for a very busy and volatile week.

Elsewhere we also have the highly publicised Trump-Kim summit, and any big news from there could see the USD move, which would also affect GBP>EUR rates under the current conditions.

So, if you have any upcoming requirements, give your Currency Index broker a call for some friendly and professional guidance on how to get the most out of your transfer. We can help assist you in protecting your budget, in what continues to be a volatile and unpredictable market, so don’t get caught out by any costly movements in the market.

Monday
09.30 GBP Industrial and manufacturing product data
14.30 USD 3 & 6 month bill auction

Tuesday
02.00 USD Trump-Kim meeting
09.30 GBPAverage Earnings and unemployment data
13.30 USD CPI inflation data

Wednesday
03.00 AUD RBA governor Lowe speech
03.00 CNY GDP data
09.30 GBP Retail price index and CPI inflation data
19.00 USD FOMC economic projections, FED Powell speech, Monetary policy statement, Interest rate decision and Conference

Thursday
02.30 AUD Unemployment rate
07.00 EUR German CPI inflation data
10.00 CHF SNB Press conference
12.45 EUR ECB interest rate decision
13.30 USD Retail Sales data
13.30 EUR ECB monetary policy statement & Press conference

Friday
03.00 JPY BOJ interest rate decision, Monetary policy statement and press conference
10.00 EUR Trade balance and CPI inflation data