The pound has recovered some strength against the euro this morning following losses at the tail end of last week. The rate is currently slightly ahead of where it began last Monday.
Against the US dollar, sterling is down 0.41% since last Monday. Economists believe it’s a volatile time for the pound, with the release of inflation and wage data later this week which will determine the effectiveness of Bank of England’s (BoE’s) monetary tightening policy.
On Friday, Italy posted a trade surplus of €7.7 bn in June. This was significantly more than the forecasted €6.6 bn and a much better result than just 12 months ago when the Italian trade deficit was €2.5 bn.
US producer prices rose 0.3% month-over-month in July, the biggest increase since January and exceeding market expectations of a 0.2% rise.
The Russian ruble continued to decline in mid-August, falling below the 100 per USD threshold, marking a new low since the onset of the conflict in Ukraine. This extends the year-to-date loss to around 38%.
UK inflation figures are due on Wednesday, following the BoE’s 25-point interest rate rise just a fortnight ago. The year-on-year inflation rate is forecast to fall from 7.9% in June to 6.9% in July. Core inflation is due to fall slightly from 6.9% to 6.8% in July.
This week, investors will be listening out for Wednesday’s FOMC minutes for insight into the Federal Reserve’s plans for the coming months. In the US, retail sales and industrial production will be key. For the eurozone, markets await GDP and inflation alongside Germany’s economic sentiment. And the UK figures this week include unemployment and retail sales.
Figures from further afield will be in the spotlight this week with China’s industrial production and Japan’s GDP, balance of trade and inflation rate towards the end of the week.
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