Sterling hit by BOE rate hike delays

Today's Highlights

• Sterling hit by BOE rate hike delays

• French and German data cause Eurozone to stall

FX Market Overview

Whether Sir Cliff Richard did anything wrong 30 years ago is entirely unclear at this stage but what the South Yorkshire police did is, in my opinion, morally repugnant. Inviting the press to see a convoy of plain clothed officers arrive at someone's home, alerting chosen journalists to your investigations into an allegation without any substantial evidence and besmirching someone's name before they have been convicted is entirely despicable. The concept of 'innocent until proven guilty' has been consigned to history and replaced by 'trial by media' and the police are complicit. No wonder respect for the police is on the slide. They appear to have lost their own moral compass.

Sterling was also on the slide in the wake of the Bank of England's comments. The delay in interest rate hikes will continue to weigh on the Pound and the lack of wages growth will act like a trailing anchor on the Pound; just as it is on the UK recovery. We will get the 2nd calculation of UK growth in Quarter 2 this morning. What Sterling sellers could do with is an upward revision to 3.2% or more. That would put some colour back in the Pound's cheeks but it doesn't appear likely. We may well head into the weekend with the Pound on the back foot.

Really poor data has put the euro into a decline but the pace is glacial. The French economy is being called the sick man of Europe at the moment but, as we know only too well, they are not alone; this week's German data has been pretty dire with a 0.2% contraction in their economy in Quarter 2. France and Germany make up 66% of the entire 18 nation Eurozone economy so their figures are very significant. So it is little surprise that the Eurozone economy failed to grow at all in Q2 and the euro is on the back foot. If that doesn't prompt a substantive QE program from the European Central Bank, you have to wonder what will. There is no significant data from Europe today so the euro itself will drift on a USD tide.

For the big data we have to look at America today. We will get producer price indices, a measure of overseas buyers in the US Treasury market and industrial production and capacity utilisation data. These latter two items are very dear to the Federal Reserve's hearts so this afternoon will be a volatile one for the US Dollar.

There isn't much else to report other than a sure sign that times are tough. I know times are tough because the Pound shops are in a price war. The pound shops were undercut by the 99p stores and now they are having sales. Prices are down to 93p and may fall further. The only problem is that goods bought from a Pound shop are like Chinese meals. 30 minutes later you need another one...but for differnt reasons..

Have a great weekend everyone.