Pound Boosted by Above Forecast Inflation Data
Pound Sterling rocket yesterday after the latest UK consumer price index figures show that price growth accelerated to above forecast levels during August.
Overall inflation leapt from 2.6% to 2.9% – matching the four-year high last registered in May. Additionally, core consumer prices rose from 2.4% to 2.7% – the fastest pace of growth recorded for six years.
UK jobless claims figures for August and average weekly earnings figures for the three months to July are set for release later this morning.
GBP/EUR Rises as ECB Official Postulates Lower Interest Rates
The GBP/EUR exchange rate rose above a five-week high yesterday after strong UK inflation data sharply increased bets that the Bank of England (BoE) will hike interest rates in the near term.
There was no Eurozone data on the economic calendar and a speech from European Central Bank (ECB) official Vitor Constancio weighed on the common currency after he suggested interest rates could theoretically be lowered if necessary.
Eurozone industrial production figures for July could help strengthen confidence in the firmness of the currency bloc’s economic recovery.
US Data Beats Forecasts, but GBP/USD Advances
‘Cable’ climbed to a one-year year high yesterday following the UK’s consumer price figures. There was little on the US data calendar to provide support to the US Dollar and allow it to resist the Pound’s advances.
What little data there was proved positive, although of low impact. The NFIB small business optimism index for August inched up from 105.2 to 105.3, instead of weakening to 104.8.
Meanwhile the JOLTS job openings report also showed a surprise uptick, rising from 6163 to 6170, instead of falling to 6000.
US mortgage applications data for the week ending September 8th and the monthly budget statement for August are the most impactful data releases on the US calendar today. The monthly budget statement is expected to show a significantly higher deficit.
GBP/CAD Erases Prior Week’s Losses
The Pound rose against the Canadian Dollar yesterday as the excitement following the Bank of Canada’s (BOC) latest interest rate hike began to dwindle further. GBP/CAD was able to return to the levels last seen before the BOC’s policy meeting last week.
US crude oil inventories data for last week will be the most impactful release for the Canadian Dollar today. A slowdown of oil inventories growth would boost the Canadian Dollar, as it points to increasing demand for crude oil in the future.
Disappointing Australian Confidence Data Helps GBP/AUD to Advance
GBP/AUD climbed to the highest levels since the beginning of August yesterday on the back of UK inflation data. The Pound was also supported by disappointing Australian data released earlier in the morning.
The latest weekly consumer confidence index fell from 114.1 to 109.8, while the NAB business confidence index slumped from 12 points to 5.
GBP/NZD Gains Slowed By Latest New Zealand Election Poll
Although the Pound registered gains versus the New Zealand Dollar yesterday, Sterling’s advance was not as pronounced versus the ‘Kiwi’ as it was against many of its major peers.
The New Zealand Dollar was supported after the latest voter opinion poll showed that the ruling National Party held a sharp lead over the opposition Labour, diminishing fears of a paradigm-shifting result from the upcoming general election.
Data Released Today
09:30 GBP Average Weekly Earnings (3M/YoY) (JUL)
10:00 EUR Eurozone Industrial Production w.d.a. (YoY) (JUL)
12:00 USD MBA Mortgage Applications (SEP 08)
15:30 USD DOE US Crude Oil Inventories (SEP 08)