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Pound holding ground ahead of BOE inflation report
Published: 13 May at 2 PM Tags: Pound Sterling, Euro Exchange Rate, Currency Exchange, Canadian Dollar Exchange Rate, Euro Crisis, UK, Economy, Inflation,
The Pound was treading water on Tuesday as the currency’s rally came to a halt ahead of tomorrow’s Bank of England inflation and UK unemployment data reports.
Sterling edged lower from a 16-month high against the Euro despite a report showing that retail sales rose by their biggest-level in three-years in April.
The BRC Sales like-for-like year-on-year data showed that sales soared by 4.2%. The figure smashed the previous figure of -1.7% and beat forecasts for a figure of 1.6%.
“It may be the case that sterling’s run is having a pause for thought. The burden of proof to provide a positive surprise from a Sterling perspective gets even higher. It may have to wait for Mr. Carney, but one could argue that is already priced in,” said Jeremy Stretch, head of currency strategy at Canadian Imperial
Bank of Commerce based in London.
The Pound was holding ground against the Euro even though Economic sentiment data out of the Eurozone and Germany came in well below expectations.
The ZEW Centre for European Economic Research said that its index for German investor and analyst expectations declined from 43.2 in April to 33.1 in May.
In the wider Eurozone the ZEW index fell to 55.2 from 61.2.
“For a few months there has been negative news like problems in the emerging markets or the strong Euro. ZEW expectations can hint at turning points in GDP growth rate, so we should expect lower growth in the coming quarters,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt.
Sterling is likely to push higher against the Euro and is expected to breach its highest level in 15-months when the Bank of England delivers its latest inflation rate report. Economists are expecting the BoE to raise their growth forecasts for the UK economy.
Also due is the release of UK unemployment data which is expected to show another fall in the number of UK citizens out of work.
The overall jobless hate is forecast to fall from 6.9% to 6.8%.
If the data does come in as expected we can expect the Pound to strengthen against most of its peers and see expectations for a BoE interest rate hike increase.
Sterling edged lower from a 16-month high against the Euro despite a report showing that retail sales rose by their biggest-level in three-years in April.
The BRC Sales like-for-like year-on-year data showed that sales soared by 4.2%. The figure smashed the previous figure of -1.7% and beat forecasts for a figure of 1.6%.
“It may be the case that sterling’s run is having a pause for thought. The burden of proof to provide a positive surprise from a Sterling perspective gets even higher. It may have to wait for Mr. Carney, but one could argue that is already priced in,” said Jeremy Stretch, head of currency strategy at Canadian Imperial
Bank of Commerce based in London.
The Pound was holding ground against the Euro even though Economic sentiment data out of the Eurozone and Germany came in well below expectations.
The ZEW Centre for European Economic Research said that its index for German investor and analyst expectations declined from 43.2 in April to 33.1 in May.
In the wider Eurozone the ZEW index fell to 55.2 from 61.2.
“For a few months there has been negative news like problems in the emerging markets or the strong Euro. ZEW expectations can hint at turning points in GDP growth rate, so we should expect lower growth in the coming quarters,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt.
Sterling is likely to push higher against the Euro and is expected to breach its highest level in 15-months when the Bank of England delivers its latest inflation rate report. Economists are expecting the BoE to raise their growth forecasts for the UK economy.
Also due is the release of UK unemployment data which is expected to show another fall in the number of UK citizens out of work.
The overall jobless hate is forecast to fall from 6.9% to 6.8%.
If the data does come in as expected we can expect the Pound to strengthen against most of its peers and see expectations for a BoE interest rate hike increase.
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Source: moneytransfer.co.uk