Will UK data releases support sterling this week? | Smart Daily Currency Note
GBP/USD – 1.5693
UK economic data last week was limited and the main influence on global currency markets was the on-going discussion on whether or not the US would continue their programme of quantitative easing. A bit more light should be shed on this as we have the Federal Reserve meeting mid-week followed by their announcement of the meetings outcome. Here in the UK we have a range of different releases. Inflation for May is expected to come in slightly ahead of the previous month at 2.6% and retail sales figures for May are expected to have recovered from the fall of 1.3% in April. We also have the release of the minutes of the last meeting for the Bank of England monetary policy committee on Wednesday. Expectations are for no changes in the voting patterns from the last few minutes so anything different would have an immediate effect on sterling. So after a steady week last week we could see sterling moving quickly as the data releases move it one way or the other. Please call your trader for an update.
The US dollar made a modest recovery towards the end of last week after experiencing some poorer performance earlier on. Reasonable increases were seen against the euro, whilst gains made against the sterling during the early afternoon were largely cancelled out by the end of trading in London. The monthly US Producer Price Index, which reflects the change in price in finished goods and services, was higher than expected, encouraging notions of a slowing down in quantitative easing. Conversely, consumer sentiment data was revealed to be worse than expected and may have held the US dollar back from making further gains. Expect to see the dollar move considerably this week in response to upcoming events. Tomorrow sees the release of the monthly consumer price index, ahead of the release of a statement by the Federal Open Market Committee on Wednesday. The members will give their projections for economic performance over the next two years and more importantly they will detail their predictions for future interest rate alterations. Traders will be paying close attention as they look for anything that might hint towards a scaling back of the bond-buying scheme of the world’s largest economy. Call in now stay up to date with market movements in what is sure to be a busy week.