Yesterday the BoE kept rates unchanged at 0.25%. Overall the communication proved to be rather dovish as Governor Carney warned of a squeeze in consumer spending as inflationary pressures surpass wage growth.
A weaker GBP left its mark on inflation, in fact much of the inflationary overshoot was being attributed to the softer currency. Despite these concerns the BoE also warned rates may rise sooner than expected and it wouldn’t take too much of an improvement in economic data to raise rates.
Yesterday the GBP lost ground against the USD with the GBPUSD hitting session lows of 1.2849. This morning weakness has persisted and the currency pair is now trading at 1.2885. On today’s daily scenario TraderTip envisages a likely fall towards 1.2868-1.284 area unless we break above 1.2994.
Concerns over Trump’s dismissal of FBI chief Comey slowed the USD’s recent move higher however the greenback is managing to shrug off most of the worries as it remains well supported. The US Dollar index is currently at 99.63; following three days of gains from Monday to Wednesday the DXY virtually closed were it started on Thursday and still in time to close the week in positive.
German GDP for the first quarter was confirmed at 1.7% earlier this morning, the figure was in line with expectations and slightly lower than the previous 1.8%. Today’s high impact data will include US CPI, US Advance retail sales and University of Michigan confidence.