Previous Day's Market Highlights
It was a volatile day for the pound as sterling reacted to the latest economic data and Brexit headlines. The pound rallied on a jump in CPI, which saw headline inflation up from 2.5% to 2.7% (it peaked at 3.1% last November) and core inflation up from 1.9% to 2.1%. Forecasts had been for both measures to slip lower. Higher inflation supports the argument for higher interest rates.
Following the data release, sterling hit 1.32 against the dollar for the first time since late July, an eight-week high. This marks a recovery of more than 4% from the rate’s mid-August lows. The pound traded at around seven-week highs in the upper end of the 1.12-1.13 band against the euro. However, the gains proved short-lived as the pound later tumbled on negative Brexit headlines from the informal meeting of EU leaders in Salzburg, including that the UK would reject the EU’s latest offer on the Irish border issue.
The kiwi dollar strengthened overnight after Q2 GDP surprised to the upside. Growth accelerated from 0.5% to 1.0% quarter-on-quarter and from 2.6% to 2.8% year-on-year. This saw sterling-kiwi fall over 0.4% to push back below 1.98.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The UK’s data releases continue with August Retail Sales (09:30 BST). Slower growth would likely weigh on the pound this morning, particularly if growth slows more than forecast, although a surprise to the upside could instead see sterling strengthen. The pound will also react to any further Brexit headlines from Salzburg today.
In the afternoon, the dollar will keep an eye on weekly Initial Jobless Claims and Existing Home Sales, both of which could be broadly supportive (13:30, 15:00). The bigger move would likely stem from any additional trade headlines and the corresponding implications for risk sentiment. The dollar strengthens as a safe haven during times of risk aversion.
On the euro side, worsening Consumer Confidence (15:00) could weaken the single currency but may have a fairly limited effect overall.
Today's Economic Calendar
|9:30am||GBP||Retail Sales MoM (Aug)||-0.2%||0.7%|
|9:30am||GBP||Core Retail Sales MoM (Aug)||-0.2%||0.9%|
|9:30am||GBP||Retail Sales YoY (Aug)||2.3%||3.5%|
|9:30am||GBP||Core Retail Sales YoY (Aug)||2.5%||3.7%|
|1:30pm||USD||Initial Jobless Claims (14 Sep)||210K||204K|
|3:00pm||USD||Existing Home Sales MoM (Aug)||5.35M||5.34M|
|3:00pm||EUR||Prelim Consumer Confidence (Sep)||-2.0||-1.9|