Post date: 25/05/2018 16:00
The pound has struggled yet again this week due to CPI data on Wednesday failing to beat or come out in line with expectations. Inflation data has been a real burden to the pound for some time now and is really struggling against the dollar. Fortunately it is holding its ground against the euro due to the Eurozone’s problems. Retail Sales data on Thursday beat expectations however, this wasn’t enough to push sterling against all majors. There hasn’t been too much to talk about the pound as of late but negative economic data and lack of optimism around hiking the interest rates is keeping the rates low compared to last month’s highs.
The euro has been struggling since last months monetary policy meeting with Draghi as there were no comments of any changes. Draghi has been saying the same thing for a while now which has raised a few eyebrows. Further to this Macron, Merkel and Draghi have hinted there could be a financial crisis soon. This is despit the Euro performing very well last year and exceeding its growth expectations. Markit PMI data failed to beat expectations on Wednesday which didn’t help the euro but next week inflation data will be released, so keep a close eye on this.
The US is going from strength to strength as of late. GBP/USD has dropped 11 cents within a month and EUR/USD has dropped 9 cents within a month. The original sell off was purely down to Trump running his mouth as usual but now this has died out, their economic data has helped the currency massively. This week Markit PMI, Durable Goods and Continuing Jobless Claims all beat expectations causing the USD to gain more and more ground against all the major currencies. Nothing much to talk about politically but some say with all this data doing so well… inflation could be a problem for the States so keep an eye on this.