Inflation report could hurt currency rates

The week started relatively quietly on the currency markets yesterday with a smattering of data providing little in the way of decisive movement, with Sterling holding close to recent multi year highs against most of the major economies.

Today is likewise not an incredibly busy day on the markets, but there are a couple of important data releases never the less.

Firstly we have a selection of German economic data and analysis out at 9am. The IFO surveys from CESifo Group are taken very seriously by the markets and are seen as a key indicator of the current sentiment and likely performance in the next few months of the German economy. Following negative industrial numbers yesterday from Germany, expect particularly close attention to be paid to this, and significant market volatility if something unexpected happens – the Euro is against the ropes as it is, without its major member economy causing even more concern…

Secondly and probably most importantly we have the inflation report hearings in the UK – Mark Carney will be up in front of the Treasury Committee to answer questions and to explain the BoE’s current policy stance and likely upcoming moves, with interest rates particularly in focus. Mr Carney recently announced that he felt UK interest rates were going to be raised as soon as this year, and this has caused much of the Pound’s current strength. Any sign of a softening of this stance could indeed see Sterling’s position unravel…

The rest of the day is fairly quiet with only a smattering of US data to trouble observers.

As ever to be kept informed on what is happening and what the likely impact is going to be, and therefore how this will affect your upcoming currency requirement, please do stay in close touch with your CI currency broker.