Rising Inflation To Push BoE Into Action?
The British Pound is being tipped to remain supported over the coming weeks amidst signals that the Bank of England is putting into plan a potential interest rate rise in the first half of 2022. The Bank has thus far communicated that it expects the current bout of inflation to be temporary and largely due from bottlenecks in global economic activity caused by the Covid disruptions of 2020.
There was a mixed bag in terms of US data released yesterday. Industrial production for June rose by 0.4%, below the 0.6% consensus, as manufacturing remained constrained, particularly in the autos sector. Meanwhile, initial jobless claims fell to 360k from an upwardly revised 386k the week before.
In level terms, GBP/USD continues to battle below the 1.3850, GBP/EUR has dropped off since the market open and currently trades also below the 1.17 handle with the EUR/USD continuing to trade within a range whilst coming in just shy of the 1.18 mark.
On the docket this morning, US data again dominates an otherwise quiet schedule. Retail sales for June are projected to fall by 0.4% in the month, albeit from elevated levels as the Michigan measure of consumer sentiment is forecast to rise.