Sterling continued its fight back yesterday with a raft of bullish inflation data released yesterday morning. However, Brexit concerns weighed on the Pound despite the decent figures. Consumer Price Index posted a 15 month high, exceeding economists’ consensus of 0.3% and registering a 0.5% y/y. PPI and RPI also posted better than expected readings yesterday morning.
However, the Brexit concerns continue to hold back the Pound as many economists’ including the International Monetary Fund (IMF), are forecasting “severe regional and global damage” if the UK exits from the European Union this June. The IMF said the planned 23rd June referendum had already created uncertainty for investors and a vote to exit would only heighten this. The IMF also cut the UK’s growth forecast, expecting 1.9% growth in the UK this year, as opposed to 2.2% estimated in January.
Today, the monthly Retail Sales figure is released from the US, with expectations of sales to return to a positive reading and for Core Retail Sales to also increase to a positive reading. As both these sales readings have been near or below zero since the turn of the year, positive figures seen here could give the Dollar some support. From the Eurozone the m/m Industrial Production figure is set to fall to minus 0.6%.