UK Inflation Steady: Impact on GBP and Economy
Main Market Movers Recap
- Germany: The ZEW Economic Sentiment Index for July dropped, reflecting that investors and analysts are taking a more pessimistic view on the economy of Germany.
- Canada: Consumer Price Index June remained unchanged at 2.9%, meeting expectations for the Bank of Canada to be cautious about future interest rate changes.
- US: Retail Sales MoM for June added 0.1 percent, matching forecasts and indicating small growth in consumer spending.
Data Today, July 17, 2024
- UK Inflation Holds Steady
This morning, data revealed the UK’s year-on-year inflation rate chimed in at 2% for June unchanged against last month’s reading and expectations. Stability would point to a stable pricing hence more in line with the efforts of the Bank of England’s management of inflation. A constant rate of inflation should positively affect the GBP, as it would suggest that the pressures of inflation were at bay, which is good for the economy.
- US Building Permits Awaited
Preliminary US building permits for June are expected to come in at 1.4 million, just a shade higher compared with the previous 1.399 million. This being one of the leading indicators of future construction activities, strong numbers above forecast could potentially shore up the USD as it depicts great conditions in housing activity and resilience in the economy.
Major Currency Pairs
Live Rate [exchange-rates_badge color=”#003E80EB” amount=”1″ base_currency=”EUR” flag_type=”rectangular” decimals=”4″ base_show=”on” code=”on” symbol=”on” after=”on” id=”1714229471″ currency_list=”USD”]
- EUR/USD: The single currency has been seen trading both ways versus the USD, as driven by mixed economic releases. The market looks for further clues in deciding the future course of action in this pair (Forex Factory) (DailyFX).
Live Rate [exchange-rates_badge color=”#003E80EB” amount=”1″ base_currency=”GBP” flag_type=”rectangular” decimals=”4″ base_show=”on” code=”on” symbol=”on” after=”on” id=”1714229471″ currency_list=”USD”]
- GBP/USD: British Pound Still Strong but Struggling to Break Out to Critical Levels Against USD; Next Move Hinges on UK Inflation Data.
Live Rate [exchange-rates_badge color=”#003E80EB” amount=”1″ base_currency=”USD” flag_type=”rectangular” decimals=”4″ base_show=”on” code=”on” symbol=”on” after=”on” id=”1714229471″ currency_list=”JPY”]
- USD/JPY: The yen has slightly weakened off the dollar, partly in response to dovish comments from Fed Chair Powell. Speculation around an intervention by Japanese officials to prop up the yen looms.
Commodities and Cross Rates:
- Oil: US crude prices remain bearish due to mixed economic signals and concerns about future demand. The market is cautious as it awaits further data and geopolitical developments (Forex Factory).
- Gold: Gold prices are nearing record highs, driven by increased expectations of a Fed rate cut in September. The precious metal continues to attract safe-haven flows amidst economic uncertainties (DailyFX).
Political and Economic News
UK: The UK is preparing to host the European Political Community (EPC) meeting on July 18, 2024, at Blenheim Palace. This significant event will bring together around 50 European leaders to discuss shared challenges such as support for Ukraine and addressing illegal migration. Prime Minister Rishi Sunak highlighted the importance of this meeting for fostering European cooperation on critical issues (Forex.com) (OANDA).
Additionally, the UK continues to face economic challenges with rising poverty levels. Recent figures indicate a concerning increase in absolute poverty, prompting the government to extend the Household Support Fund to assist vulnerable households (DailyFX).