Following the release of Bank of England minutes, which revealed that there still was no change from the 7 votes to 2 in favour of raising UK interest rates, GBP started the morning off on the back foot but did manage to gain back losses as the day’s trading progressed. What the vote ended up meaning is that the majority of MPC members don’t want to raise the rate until the middle of next year. This morning we will see retail sales numbers out for the UK which will offer some good insight into how the UK economy is performing. Expectation going into it is that the figures will show a decline for year-on-year numbers which, if so, will mean a drop-off in consumer demand. This will certainly have an impact on GBP if so.
There wasn’t any data out yesterday to keep EUR in the spotlight and as such we saw it dip against the other two majors. Today is different, though, with PMI data out for the Eurozone and Germany out – both of which are expected to make slights reductions. There will be consumer confidence indicators out later in the morning which are also set to make a negative decline from the target of 0%.
The US dollar had a strong day yesterday with key data coming in hotter than expected, aiding gains against both GBP and USD. Mortgage data was the big hit seeing as it came in at 11.6% as opposed to the predicted 5.6%. This shows a lot of positivity for household income and spending and shows that the economy is looking up. CPI numbers, which were also expected to come in a bit weaker, came in on par with previous readings. Today will be a bit more eventful with housing, jobs, and PMI data out at midday.
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