The pound lost across the board yesterday, losing an average of 0.3%. This poor performance came despite positive industrial and manufacturing output numbers. The pound has been hit by sell-offs recently, as investors take profit from positions and question if the currency could see any more positivity without significant catalysts.
A lack of economic data releases today could see the pound vulnerable to wider market moves, however many investors will now be looking ahead to next Monday’s CPI inflation data release. If we see a notable increase in inflation the pound may benefit from rising hopes that the Bank of England will raise rates sooner than is currently expected.
The single currency performed well yesterday, gaining ground across the board and ending the day up an average of 0.3%. A disappointing French industrial output number had a limited impact on the currency, despite the fact that it fell over 2%. The primary support for the euro came following positive sentiment ahead of the release of the ECB’s most recent meeting minutes.
A lack of economic data releases today could see the euro struggle against wider markets, especially given the expectation for positive numbers form the single currency’s counterparties.
The greenback posted a mixed performance yesterday, gaining against the pound but losing 0.2% against the euro. This came following wider market pressures combined with a batch of mixed data. While US import prices fell more than expected, down 0.4% more than predicted, wholesale sales rose by 0.8%, which limited downside pressure on the greenback.
This support for the greenback was further supported after China's regulator dismissed a report that the country could halt its buying of US Treasuries.
Today we have the release of initial jobless claims, which look set to fall by 5,000 and could provide further support for the dollar.
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