Yesterday was a fairly quiet day for UK and EU data which meant markets had little to go on. The day started early with some Swiss releases where we saw trade balance come in drastically under forecast. This paved the way for weakening and we saw sterling make steady gains all day. With the Swiss vaguely pegged to the euro, this also factored in the pounds gains as sterling climbed back to the recent peak against the single currency despite struggling against everything else.
UK public sector borrowing was greater than forecast by a quarter billion pounds and the CBI industrial trends survey forecast at 8 registered at 2. These poor figures meant sterling lost ground against all other majors, bar the euro and affiliated currencies (like the Swiss and Scandinavians).
Although the gains weren’t large, the Kiwi, Aussie and Canadian dollars all gained half a cent. The US gained just under half a cent as inflation figures came out as expected and new home sales showed a big increase of half a million above expectations.
The markets now look to the Bank of England today and the release of the BoE minutes this morning and speech by governor Mark Carney after lunch. Will he make any significant comments about interest rates going up here, or will he quash recent analyst comments of a potential increase in November, which came on the back of the inline inflation figure.
In addition we see EU consumer confidence figures, Canadian retail sales and this evening it’s the Royal Bank of New Zealand’s interest rate meeting and trade balance. We are expecting a 25 basis point rate hike which could see the Kiwi strengthen so if you have a transfer to make down under, it could be worth speaking to one of the CI team during trade today.