Sterling appreciated against its major counter-parties throughout the day yesterday after a better than expected inflation figure hit the wires. The yearly CPI (Consumer Price Index) improved to 0.6% from 0.5% previously. The price of oil continued its rise in July helping to contribute to the slight uptick in UK CPI. Air fares also remained elevated due to the holiday high season and Euro 2016 football championships.
The Greenback continued to decline on speculation the US will keep interest rates lower for longer. The Dollar re-visited its pre-Brexit levels against the Dollar Spot Index yesterday as further poor economic releases dampened sentiment in the world’s largest economy. CPI remained anaemic yesterday afternoon and PPI last week posted its lowest level in 10 months.
Today’s main focus will be the release of July’s FOMC meeting minutes. Economists’ will attempt to decipher the Fed’s tone in an attempt to gauge just how close they may be to raising rates this year. Before this, the UK will post a raft of labour data. Firstly, the unemployment rate is due to stay at 4.9%, average earnings is forecast to post 2.5% and claimant counts is scheduled to increase modestly from 0.4K up to 5.2K