UK data key for GBP this week

Market reports
Thanim Islam
  • Jobs and inflation key for GBP this week
  • US retails spending to boost USD?


GBP’s positive start following Friday's better-than-expected GDP numbers continued into the afternoon, with the currency finishing higher across the board.

USD also finished the week strong after producer price inflation numbers all came in higher than expected  - the USD index had its fourth consecutive positive week


Market rates

* Daily move - against G10 rates at 7:30am, 14.08.23

** Indicative rates - interbank rates at 7:30am, 14.08.23

Data points

Our thoughts

Monday looks set to be quiet but for GBP for the rest of the week, there is plenty to consider. Job numbers are out on Tuesday with average earnings expected to rise further to 7.4%. UK inflation is expected to drop to 6.8% with the core number expected to slip to 6.8% as well, which should dent hopes of an additional 0.50% worth of rate hikes by the end of the year. The week will finish with July’s retail sales expected to come in lower on account of the wet weather.

US retail sales are out on Tuesday, expected to have been boosted by Amazon Prime Day, higher gasoline prices, and higher vehicle sales. Upbeat data will support the idea of the resilience of the economy, and should support USD

EU GDP for Q2 will be released on Wednesday, expected to show the economy grew at 0.3%.

Chart of the day

Services inflation and wages data remain the Bank of England’s chief concern with regards to how many more rate hikes are going to be needed. Wages are expected to rise to 7.4%, but core inflation and headline inflation are expected to ease to 6.8% which could counter the prospect of seeing peak interest rates at 5.75%.

Source: Bloomberg Finance L.P.

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