The fact that Sterling sharply depreciated across the board on Tuesday, after British inflation rates unexpectedly dropped to 2.6% in June, continues to highlight how the currency has become increasingly sensitive to monetary policy speculation.
Another day in Europe is coming to an end, and those who like volatility were not left disappointed with the euro and pound making sharp moves as speculators responded to fresh rumors and comments from central bank officials.
Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year.
It’s been a relatively flat start to trading on Friday but things should pick up as we approach the U.S. session, with retail sales and inflation data due to be released, among others, and the Fed’s Charles Evans scheduled to appear.
U.S. producer prices fell in March for the first time in seven months, weighed down by a drop in the cost of services and energy products, but the largest annual increase in five years suggested inflation was rising.
U.S. import prices recorded their biggest drop in seven months in March as the cost of petroleum declined, but the underlying trend pointed to a moderate rise in imported inflation as the dollar's rally fades.