rates table

Sterling edges higher ahead of BoE meeting

22nd March 2018 Market Update

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?? GBP – Sterling hit the day’s high after data on Wednesday showed that British workers’ overall pay rose at the fastest pace in nearly 2 1/2 years over the three months to January, boosting chances that the Bank of England will raise interest rates in May.

The Office for National Statistics also said the number of people in work grew by 168,000 in the three months to January. A Reuters poll of economists had pointed to a much smaller rise of 84,000. Today from the UK we have data in the form of the Bank of England interest meeting and press conference in the afternoon, before that we have retail sales figures at 9:30am, both will set the tone for where Sterling could finish the week.

?? EUR – From the Eurozone on Wednesday the euro traded sideways against the greenback on limited data, though economists have stated we could see a strengthening in the euro on further uncertainty from across the Atlantic in the way of interest rates hikes and tariff hikes.

?? USD – The dollar recorded its largest one-day loss in two months against a basket of currencies on Wednesday as Federal Reserve officials stuck to their view of three rate increases for 2018 as they want to see a further pickup in inflation.

The currency continues to weaken as US tariffs look to play a major role is the short-term play guidance in the greenback. The only piece of data from the US today comes in the form of initial jobless at 1:30pm.

 

Key Announcements

?? GBP
09:30am: BoE Interest rate meeting
09:30am: Retail sales MoM – expected 0.4% – previous 0.1%
09:30am: Retails sales YoY – 1.3% – previous 1.6%

?? USD
12:30pm: Initial jobless claims expected 225 – previous 226
13:45pm: PMI Manufacturing expected 55.5 – previous 55.3
13:45pm: PMI Services expected 55.8 – previous 55.9
13:45pm: PMI Composite expected 55.7 – previous 55.8

 

Summary: Sterling jumps on strong jobs data, as traders eye interest rate meeting and press conference. British workers’ overall pay rose at the fastest pace in nearly 2 1/2 years over the three months to January.

 

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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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