- USD strengthened by Federal Reserve Chairman’s comments
- Inflation and housing data awaited
By David Johnson
Sterling is looking a little battered and bruised this morning after a narrow win for the Prime Minister against the slings and arrows of outrageous fortune… or the ‘remainers’, to use the vernacular. There is a good chance this morning’s UK inflation data will be up a little on last months; something like 2.5% or 2.6% and that ought to support the Pound, but politics is still the elephant in every room of the house. Sterling is in the low end of its ranges at €1.1250 and $1.3050 or thereabouts.
EU Inflation data likely to breeze by
We will get EU inflation data today as well. It is the final calculation of the June data and a 2.0% annualised rate is very likely to be confirmed. Hence, it will breeze by with almost no discernible backwash.
US Dollar gains on economic news
The US Dollar is generally stronger across the board. Federal Reserve Chairman, Jerome Powell, testified that the US economy is doing very well overall and he cited inflation hitting 2% and mentioned the ongoing robustness of the US labour market. He also quite clearly threw his weight behind further interest rate hikes and that definitely helped the USD to strengthen. This afternoon brings some US housing market data and that should support further USD strength, assuming the forecasts are accurate. We will also get the release of the US Beige Book; a regional look at the US economy from the perspective of the Federal districts. That is always an interesting read and the USD may well react if the views aren’t quite in keeping with Mr Powell’s rosy specs view.
Australian jobs news expected overnight
That’ll complete UK trading hours, but we will get Australian employment data overnight tonight. Ten to fifteen thousand fresh jobs are expected to have been created but that is unlikely to bring the unemployment rate down below the already fantastic 5.4%. For a vast country with such sparse population, largely grouped around a few major cities, this is about as near to full employment as anyone could wish for. The GBPAUD rate is still attached to A$1.78 by a bungee cord, boinging up and down but unable to break free.
The gift that keeps on giving
And Trump is the gift from America that keeps on giving isn’t he? He either does or doesn’t see the Russians meddling in US elections, but that depends on which day you ask him. I heard a comment this morning that keeps making me giggle. It was that you kind of expect everything Trump says to end in the line, “So can I have some ice cream now, Mum?” Yup, that about sums it up.