Good morning everyone!
This week has been quite a busy one. Yesterday the Bank of England kept the interest rates unchanged at 0.5% as expected by a majority vote of 8-1. The 12-month CPI inflation for November rose to 0.1% and is likely to rise gradually in the coming months. However, the slump in oil prices will mean that the increase in the inflation figure will be more gradual than expected. The Monetary Policy Committee’s target is to attain the target inflation of 2% and will aim to do this steadily in the future with the hope that it will reach the target in 2 years. The path that the Bank takes will always depend on the country’s economic circumstances.
As a result of this and coupled with the negative Manufacturing Production data that was issued this week, sterling has taken quite a big hit!
Oil prices slumped again, signifying that the sentiment on China is still taking its toll on commodities. Stock markets are also following in this pattern. CAD, also being a commodity currency, has been greatly affected by this drop in oil prices.
Today’s fundamental news comes in at 1.30pm (GMT) and is the Retail Sales and PPI for the US; be careful at this time when trading the dollar.