Today’s focus will be on GBP/USD and UK interest rates. Cable has taken a beating as of late as the Greenback has rallied on the idea that a strengthening US economy will prevent the Fed from cutting rates. Where to now?
If we see weaker than expected CPI data, this will further take away any reasoning that the Bank of England will need to continue to fight inflation with further hikes. Of course, if we continue to see inflation strengthen then we can bet that a short-term rally will occur.
The Trade Balance report will be a strong indicator of the health of the economy, so look out for both reports at 4:30 am EDT. Here’s our trade idea to prepare for positive or negative UK data:
Good luck and good trading!