3 Forex Event Risks for the Pound This Week


If you’re trading the British pound this week, make sure you watch out for these three main events set to rock the forex charts! Here’s what each economic event is all about, what is expected, and how it might affect the pound:

1. U.K. CPI (Tues 9:30 am GMT)

First among the top-tier releases from the United Kingdom this week is the consumer price index, which gauges annual inflation or the yearly increase in price levels. This is a closely watched report since it helps the British central bank decide how to manage monetary policy, as strong inflationary pressures usually lead to tightening or rate hike expectations.

For the month of July, the U.K. is expected to show a slowdown in CPI, as the headline figure could dip from June’s 1.9% reading to 1.8%. Meanwhile, the core figure is projected to tick lower from 2.0% to 1.9%. Weaker than expected results could be bearish for the pound as these could further undermine the possibility of seeing a BOE interest rate hike this year.

2. BOE meeting minutes (Wed 9:30 am GMT)

Next up is the BOE meeting minutes which should shed more light on policymakers’ biases when it comes to adjusting interest rates. You see, BOE officials had been buzzing about a potential rate hike before the end of this year but later on backpedaled on their forecasts when economic data reflected a significant amount of slack.

In particular, members of the monetary policy committee are concerned that the lack of wage growth could soon take its toll on consumer spending. After all, people are less likely to spend if their salaries are lagging far behind rising price levels. Apart from that, policymakers appear to be less concerned about a housing price bubble, as home prices and mortgages have retreated recently.

If the minutes of BOE’s latest meeting confirm that Governor Mark Carney and his men are no longer considering hiking rates this year or early next year, the pound might be in for a steeper drop!

3. U.K. retail sales (Thurs 9:30 am GMT)

Last but not least is the retail sales release, which indicates whether consumer spending increased or decreased during the reporting period. This is also an important piece of data since consumer spending contributes a hefty chunk to overall economic growth.

For the month of July, retail sales is expected to pick up by 0.4%, a faster pace of increase compared to June’s 0.1% uptick. Bear in mind that retail sales figures have been coming in better than expected for three out of the last five months so there’s a good chance of seeing an upside surprise.

However, as I mentioned earlier, the lack of wage growth remains a persistent concern in the U.K. economy and this might be reflected in a bleak spending figure for July. If so, more market participants would be convinced that the slack in the U.K. economy is weighing on its economic performance and might be less inclined to buy the pound.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD drops below 1.0800 after German Retail Sales data

EUR/USD drops below 1.0800 after German Retail Sales data

EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus. 

EUR/USD News

GBP/USD stays weak near 1.2600 amid market caution

GBP/USD stays weak near 1.2600 amid market caution

GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull. 

GBP/USD News

Gold price holds strength ahead of US core PCE inflation

Gold price holds strength ahead of US core PCE inflation

Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday. 

Gold News

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase. 

Read more

Portfolio rebalancing and reflation trades emerge into Q2

Portfolio rebalancing and reflation trades emerge into Q2

Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.

Read more

Majors

Cryptocurrencies

Signatures