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Eurozone GDP, Inflation and Jobs Report

31st October 2017 Market Update

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🇬🇧 GBP – In the absence of any major news the pound gained across the board yesterday ahead of Thursday’s widely anticipated interest rate hike by the Bank of England.

We could well see a similar story today as once again there is no data due out today.

🇪🇺 EUR – Whilst the political turmoil continues in Spain, the nation’s GDP expanded by 0.8% in the third quarter of 2017, which is twice as fast the UK. German inflation figures disappointed dropping more than expected to 1.6%, which did cause the euro to weaken throughout the day giving clients the best opportunity to convert from Sterling since 1st October this year.

Today will see the release of 3rd quarter GDP figures, unemployment numbers and inflation data all due out at 11am this morning. The key figure here looks set to be the inflation figure which is forecast to decline, as predicted by Mario Draghi last week.

🇺🇸 USD – The US dollar index declined yesterday despite US consumer spending surging by 1% in September, its fastest pace in eight years.

No data due out today with market attention on the US being at the end of the week with the release of Friday’s job figures as well as Donald Trump’s announcement of who the new chair for the Fed will be on Thursday.

 

Key Announcements

🇪🇺 EUR
11:00am – GDP Q3 – Forecast to rise to 2.4%, Unemployment Rate – Forecast to drop to 9%, Inflation – Forecast to drop to 1.4%

 

Our View: Markets are riding the wave of this anticipated rate hike by the Bank of England pushing the pound higher. Clients buying euros are now enjoying the cheapest rate since 1st October 2017.
 
However a word of caution must be noted. As seen by last week’s monetary policy announcement made by the ECB, where the bank disappointed with its reduction in quantitative easing; we could well have a situation where the BoE decide to do nothing at all and all gains seen so far in the pound could be erased very swiftly.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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