As it has been for the last couple of weeks, things were quiet in terms of data for the UK yesterday although it’s a different case today as we’ll see an inflation report from the Treasury Committee and inflation numbers then shortly afterwards. It’s expected that the rate will remain the same, although we did see things take a dip into negative territory in October. If we see things edge towards a flat 0% then it should have a positive effect on the pound. Of course, it’s the 2% that the BoE are after – so all eyes will be peeled to find out what the story is. This morning has already shown some positivity for the pound which was hit a 3-month high against the euro at 1.4250 Interbank.

In the wake of Paris’ Friday night horror, EUR took a bit of a knock – GBP/EUR hit 1.4220 Interbank while USD/EUR hit a six-month low at 1.0770 Interbank. In terms of data, things were looking a bit better as CPI came in better than expected for both yearly and monthly levels. While inflation has seemed to bottom out, it’s not dropping any further which may be a sign that the European Central Bank’s QE measures are working. This obviously all sits within the broader context of a sluggish global economy, though. If going by a speech given by Mario Draghi last night, then it could be the case that Europe’s QE has also been good for the UK and US versus the single currency.

Data out today for Europe includes Germany’s ZEW sentiment survey – a good indicator of investor sentiment about the health of the economy. Despite some weaker data out for manufacturing, as seen from New York yesterday, the dollar still managed to make some gains. The NY Fed did, though, post improved business conditions from -11.4 to -10.7. Investors also seem to move towards the dollar after the Paris massacres, but punters are also hopeful of a Fed rate rise before the year is up.

In terms of data today, we’ll see CPI inflation numbers around lunchtime; month-on-month this is expected to come in as positive. There will also be further industrial and manufacturing figures, along with mortgage delinquencies.

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