Understandably sterling became a bit nervier as lunchtime approached, the impending Bank of England meeting containing a few notes of uncertainty.
Though still above $1.32, the pound has nevertheless shed its early growth against the dollar. Against the euro, meanwhile, sterling slipped 0.2%, taking it back below €1.11. This, alongside the Next-driven (and John Lewis ignoring) retail sector growth, allowed the FTSE to reduce its own losses to just 10 or so points, even if the red-soaked miners (hurt by the fall in Chinese industrial production) prevented a fully-fledged rebound.
Cable’s reaction to the afternoon’s Bank of England statement could be complicated by the US inflation reading. Like their English counterpart, inflation is the key issue for the Federal Reserve at the moment; unlike in the UK, however, the US is dealing with persistently low, rather than startlingly high, CPI data.
The latest figure is expected to rise from 0.1% in July to 0.3% in August. That would be the best reading for 7 months, and could give the Fed food for thought ahead of its own meeting next Wednesday. It would also give a boost to the dollar, explaining why the Dow Jones is set to fall 0.1% after the bell (though, admittedly, the index could sneeze and hit a fresh all-time high).
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.