Any chance for sterling to make it out of the red this week? Or will Brexit troubles and overall risk aversion keep weighing it down?
U.K. jobs data (Aug. 13, 8:30 am GMT)
First up, we’ve got U.K. employment figures, which include the claimant count change, average earnings index, and unemployment rate.
The claimant count change, which is the change in the number of folks getting unemployment benefits from one month to the next, is slated to have increased from 38K to 42K in July. A higher than expected figure would suggest that the jobs situation might be worsening.
On a less downbeat note, the average earnings index is expected to improve from 3.4% to 3.7% to reflect a pickup in wages. In turn, this could be positive for consumer spending and overall inflation down the line.
The unemployment rate is projected to hold steady at 3.8%.
U.K. inflation reports (Aug. 14, 8:30 am GMT)
Next, we’ve got U.K. inflation readings for the month of July. The headline CPI is expected to dip from 2.0% to 1.9% on a year-over-year basis while the core version of the report could hold steady at 1.8%.
Meanwhile, underlying inflation figures are hinting at a slight pickup in price pressures. Producer input prices could rebound by 0.6% after previously slipping by 1.4% while output prices could post a 0.1% uptick from the earlier 0.1% drop.
U.K. retail sales (Aug. 15, 8:30 am GMT)
Consumer spending data is also due this week, and analysts are expecting to see lower purchases for July. The retail sales figure for the month is projected to have dropped by 0.3% after previously rising by 1.0%.
A positive read or stronger than expected results might be enough to assure traders that Brits are maintaining their spending habits even with Brexit uncertainties in play. On the other hand, a weaker than expected reading could reinforce BOE easing expectations.
With less than three months left until the official Brexit date and not much progress being made, it’s understandable that pound traders are extra jumpy when the words “no deal” are being floated around.
Word on Downing Street is that MPs are lobbying for PM Johnson to request for yet another extension on the deadline, but that might be a lost cause EU officials have maintained that they also won’t renegotiate the transition deal.
Any signs of progress could keep the pound’s losses in check, but more indications of discord with EU leaders and within Parliament could drag the currency much lower.
Missed last week’s price action? Read GBP’s price recap for August 12 – 16!