We saw GBP dip against its peers yesterday following a speech by the BoE’s deputy governor, MinoucheShafik, that mentioned how it was important to refrain from hastily voting for an interest rate rise before wage growth has caught up with inflation. She also went on to say that when the rate does finally come, it’ll pave the way for a succession of rate rises, possibly more quickly than the market expects. This, however, is in stark contrast to a comment by the RBS’ Chief Executive that there might not be an interest rate hike at all next year.
Data from the UK today includes CPI figures – expected to come in at 0.1%.
In Europe, there was little by way of high important data, but we did see industrial production increase to 1.9% (yearly), and a monthly overall number of 0.6% which is up from -0.3%. Added to this, we saw the ECB Chief talk yesterday about more monetary stimulus for theEurozone. This had a positive effect for EUR which gained against the pound (by 0.6%).
In terms of data today, we’ll see ZEW surveys from Germany which will offer insight into the economic sentiment currently.
In the States, it’s all about the interest rate announcement tomorrow –it is widely expected that the Fed will increase rates for the first time in 9 years. There hasn’t been much movement from the dollar this week, but this may be because investors are waiting to purchase the currency around the time of the hike.
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