UK Retail Sales Decline: What It Means for GBP
Japan Inflation: Japan reported its June inflation data last week with a Consumer Price Index rise of 2.8% year-on-year, in line with expectations. This continuous increase keeps on adding to expectations about possible policy adjustments that could happen from the Bank of Japan.
UK Retail Sales: UK retail sales posted a sharp 1.2% MoM decline in June, well below the consensus of -0.4%. This poor data points to still significant challenges to consumer spending and is weighing on the GBP.
ECB Interest Rate Decision: As was anticipated, the European Central Bank decided not to make a change in interest rates, holding interest rates at 4.25% last week. Though stressing again that inflation needed to be kept under close monitoring, no change could be made for September.
Key Data to Watch in the Markets in the Week Ahead
- Eurozone: Flash PMI releases for July will offer some insights into the economic health of the Eurozone. This should be crucial data, showing just how well the region can pull through and if the recovery strengthens.
- US: Attention shifts to June’s durable goods orders for indications on business investment and manufacturing activity.
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 Euro has kept within narrow ranges against the USD. Traders look to Eurozone PMI readings due later for direction.
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: The British Pound is under pressure following soft data from retail sales. Formations of the pair will be based on future UK economic releases and global risk sentiment.
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 continues to show mixed performance. We are closely watching for any signals from the Bank of Japan regarding potential policy changes.
Commodity Prices
- Oil: The prices of US crude are now bearish. Traders are looking out for further economic data and geopolitical events, and assessing them for clues to demand in the future.
- Gold: Gold prices are now staying close to record highs on expectations of a rate cut by the Fed in September. The precious metal is still the preferred safe-haven asset in light of global economic uncertainties.
Political and Economic News
US Federal Reserve Comment: The most recent comments from the Federal Reserve indicate that officials are adopting a more cautious tone in cutting interest rates. Fed’s Barkin and Mester have separately suggested that it needs more evidence of a downward trend in inflation before considering significant policy changes.
International Market Sentiment: Geopolitical tensions continue to remain in the close scrutiny of investors as their intersections with market stability further unfold. Security of energy and supply chains are likely to remain the prime concerns driving sentiment in markets and thus investment pattern shifts.