Good afternoon,
It has been a quiet start to the week in terms of economic data releases and as a result there were no major surprises in the currency market today. However, that didn't stop the dollar gaining against the pound and over the course of today's session GBP/USD exchange rates fell over half a cent, leaving the currency pair perilously close to a fresh one year low.
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What to watch out for this week.
There are a number of key releases and speeches later in the week that could have an impact on the value of the pound and dollar. The first release of any real note will come from the UK on Wednesday when we see the Bank of England (BoE) inflation report and a speech from BoE Governor Mark Carney.
The inflation report will be monitored closely as it provides the BoEs projections for economic growth and inflation for the next two years and ultimately influences their interest rate decision. With the UK's last inflation reading coming in at 1.2% we have already seen a potential rate hike pushed back until the middle of next year but if Mr Carney provides any clues on Wednesday about when the rate rise will take place it could give the pound a little push.
Over in the States, the first real data of note comes on Friday in the form of manufacturing and core retail sales, both have ability to sway the value of the dollar and with improvements expected in both sectors we could see the dollar make further gains against the pound.
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