We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
More View more
Real Time News
  • Fed keeps pace on reserve T-Bill purchases at $60b per month -BBG
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.56% Silver: 0.39% Oil - US Crude: 0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/nGk6siLuAj
  • #Gold prices have responded to key support with the recent recovery now targeting the first resistance target at 1472- look for a reaction here. Get your $XAUUSD technical analysis from @MBForex here: https://t.co/DOaEk7zMub https://t.co/psZR1kviqk
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.57%, while traders in France 40 are at opposite extremes with 84.14%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/MicO4pBhXR
  • Banxico: - Core inflation running persistently high $MXN
  • $USDJPY drops as Financial Times reports that China continues to delay truce with US in struggle to close phase-one trade deal https://t.co/Nm2LnUSyRx
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: France 40: 0.01% Germany 30: -0.10% US 500: -0.14% Wall Street: -0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/MLZRHQnmWc
  • Fed's Bullard: - Review of policy is evolution, not revolution $DXY $SPX
  • RT @Scutty: Global Debt Surges Above $250 Trillion as U.S., China Lead Way https://t.co/Lgr5sUSGQx
  • RT @LiveSquawk: Fed's Bullard: Fed Can Reconsider Whether To "Take Back" Recent Insurance Cuts If And When Businesses Adjust To New Trade L…
GBP May Fall on CPI as Brexit Hopes Fizzle. USD Eyes Retail Sales

GBP May Fall on CPI as Brexit Hopes Fizzle. USD Eyes Retail Sales

2019-10-16 07:00:00
Dimitri Zabelin, Junior Currency Analyst

GBP Outlook, US Dollar, Brexit, US Retail Sales – Talking Points

  • The British Pound may fall on UK CPI data amid fizzling Brexit hopes
  • Ongoing uncertainty over EU-UK divorce may force BoE to cut rates
  • USD may fall on retail sales unless demand for liquidity overwhelms

Learn how to use political-risk analysis in your trading strategy!

The British Pound may fall on a cascade of UK CPI data if price growth for September shows a soft print. A contributing factor behind weaker inflation and business confidence has in large part to do with the uncertainty associated with the UK’s future. BoE Monetary Policy Committee Member Gertjan Vlieghe said that stimulus may be required if uncertainty about Brexit continues to negatively impact the economy.

Business and consumer confidence continue to be bruised by prolonged EU-UK negotiations which has in turn pressured the BoE to consider easing measures. Furthermore, the external backdrop has not been doing favors for the UK economy either. Last week, IMF Director Kristalina Georgieva warned of a “synchronized slowdown” with new growth forecasst for 2019 at a new post-recession low of three percent.

Today, BOE Governor Mark Carney will take part in a panel discussion at the annual IMF conference in Washington. His commentary – particularly in the context of Brexit – may pressure the British Pound. ECB Executive Board Member Philip Lane will also be speaking at the event which could pressure Euro crosses if it further undermines growth prospects in the Eurozone.

Market volatility may also be amplified by the publication of a series of US retail sales reports. Since June, economic data out of the US has improved, but more recently its been slumping. A lower-than-expected print in retail sales may boost what are already ultra-dovish Fed rate cut bets. Overnight index swaps are currently pricing in a 74 percent probability of a 25bps cut by the end of this month.

While easing expectations at this particular point in time may weigh on the US Dollar, demand for liquidity amid a recent setback in US-China diplomatic relations may overwhelm the pressure of Fed rate cut bets. The Greenback may also get an additional tailwind if speakers at the Institute of International Finances’ annual meeting induces risk aversion if their findings reveal growing vulnerabilities in the global financial system.

Market Analysis of the Day: Australian Dollar, Off-Shore Yuan Fall After China Threatens Retaliation for US Hong Kong Bill

Chart showing USD/CNH

AUD/JPY chart created using TradingView


--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.