Analysis and Recommendations: The GBP/USD soared 103 points to 1.5691 after inflation data showed a strong jump in prices. Even PPI printed better than
The GBP/USD soared 103 points to 1.5691 after inflation data showed a strong jump in prices. Even PPI printed better than expected. The British pound managed to record decent gains against the US dollar over the previous week – strong inflation data could push it towards a key resistance level in the near-term. The currency continues to track movements in domestic and US yields and interest rate expectations so it will be important to see if we get any pick up following a disappointing Quarterly Inflation Report from the Bank of England.
“It is unlikely to see any major breakouts as traders tread lightly in August so look to take advantage of the range,” says Manimbo.
Indeed, we have been saying for some time now that we see the 1.56 level as the fair-value point to which GBP/USD will gravitate.
Britain’s annual inflation rate edged up to 0.1 percent in July — the sixth month in a row it has hovered at or near zero. The Office of National Statistics says the rate compared with a flat reading in June and was due to clothing prices, as there were smaller price discounts in this year’s summer sales compared with a year ago. Food and fuel prices continued to drop, holding overall costs back.
The figure released Tuesday means there’s little pressure for the Bank of England to raise interest rates.
Some policymakers, however, are concerned about the impact of low rates over the long term. Kristin Forbes, a member of the Bank of England’s monetary policy committee, told the Daily Telegraph that “waiting too long would risk undermining the recovery.”
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Today’s economic releases:
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
USD |
TIC Net Long-Term Transactions (Jun) |
103.1B |
23.0B |
93.0B |
|
||
AUD |
Monetary Policy Meeting Minutes |
|
|
|
|
||
GBP |
CPI (YoY) (Jul) |
0.1% |
0.0% |
0.0% |
|
||
GBP |
CPI (MoM) (Jul) |
-0.2% |
-0.3% |
0.0% |
|
||
GBP |
PPI Input (MoM) (Jul) |
-0.9% |
-1.9% |
-1.8% |
Upcoming Economic Events that you should be monitoring:
Wednesday, August 19, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
USD |
API Weekly Crude Oil Stock |
|
|
-0.847M |
|
||
NZD |
PPI Input (QoQ) (Q2) |
|
|
-1.1% |
|
||
JPY |
Exports (YoY) (Jul) |
|
5.5% |
9.5% |
|
||
JPY |
Trade Balance (Jul) |
|
-57B |
-69B |
|
||
USD |
Core CPI (YoY) (Jul) |
|
1.8% |
1.8% |
|
||
USD |
Core CPI (MoM) (Jul) |
|
0.2% |
0.2% |
|
||
USD |
CPI (MoM) (Jul) |
|
0.2% |
0.3% |
|
||
RUB |
Unemployment Rate (Jul) |
|
5.5% |
5.4% |
|
||
USD |
Crude Oil Inventories |
|
|
-1.682M |
Government Bond Auctions
Date Time Country
Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz
Aug 19 11:03 Sweden Holds bond auction
Aug 20 10:30 Spain Auctions Bonos/Obligaciones
Aug 20 11:30 UK Auctions 4.25% 2036 Gilt
Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug