Key Headline:

Focus on UK Inflation and Retail Sales: This week, all eyes are on key economic data from the UK, with inflation figures and retail sales taking centre stage.
 

Yesterday Recap

• GBP Declines Persist Amid Disappointing GDP Data: The pound continued to weaken throughout the day after morning GDP figures came in below expectations. This, combined with falling equities, deepened the prevailing risk-off sentiment.
• USD Strengthens on Retail Sales Beat: The US dollar advanced further, supported by monthly retail sales figures that slightly exceeded forecasts.
• JPY Outperforms on Intervention Speculation: The Japanese yen emerged as the strongest currency of the day, buoyed by remarks from the Finance Minister suggesting potential intervention in the currency market.

Today’s Rates

Today's Interbank Rates at 09:31 am against GBP movement.

GBP>EUR – 1.1945

GBP>USD – 1.2624

EUR>GBP – 0.8369

EUR>USD – 1.0566

GBP>CAD – 1.7782

GBP>AUD – 1.9538

GBP>SEK – 13.865

GBP>AED – 4.6348

GBP>HKD – 9.8250

GBP>ZAR – 22.841

GBP>CHF – 1.1180

GBP>PLN – 5.1758

Today’s Key Takeaways

Key UK Data Releases:

• UK CPI figures, set for Wednesday, are expected to rise to 2.1%, driven by higher household energy costs. A higher print could reinforce expectations that the BoE will hold off on cutting rates in December.

• UK retail sales data is scheduled for Friday, adding another focal point for GBP movements this week.

European Economic Indicators:

• Final October CPI data and Q3 Euro Area Negotiated Wage figures are due from Europe, offering insight into the likelihood of an ECB rate cut of 25 or 50bps in December.

Global PMI Releases:

• November PMI data for the UK, EU, and US will be released on Friday, providing a broader view of economic activity across regions.

USD Outlook and Hedging Opportunity:

• While USD strength is expected over the long term, a quieter week for US data may create a chance for some retracement. This could offer a good opportunity for buyers to hedge against the dollar’s longer-term bullish trajectory.

GBPEUR Under Pressure:

• Weak UK GDP data has raised concerns about the British economy, eroding recent GBPEUR strength. A continuation of soft UK data this week may result in further declines for GBPEUR.
  

Speeches:

• EUR: Speeches and insights expected from key ECB figures, including Guindos, Makhlouf, Lane, and President Lagarde.
• GBP: Focus on remarks from BoE’s Greene.

18^th November 2024



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