The Pound continues to struggle against both the Euro and the US Dollar but will today’s CPI & RPI figures give the currency a much needed boost…
In the US today the measure of new home sales jumped sharply in January to an almost six year high. Markets are expecting activity to have settled down to a more subdued pace following poor weather. The dollar continues to look strong as it hits a six week high against sterling.
Today is a busy day for the UK with CPI inflation taking centre stage. Markets expect CPI to drop further in today’s release to 1.7% from 1.9%. The pound has approached a six-week low versus the dollar and is nearing its weakest level this year against the euro.
The Euro remains stronger this month following Mario Draghi’s view that the euro area does not need more monetary easing for now which appears to be justified as manufacturing and services activity in the region is near the strongest in almost three years . Interest rate cuts, liquidity injections and a controversial pledge to buy the bonds of crisis-hit countries have boosted business confidence and prompted renewed fund flows into stressed economies.