The pound is mixed this morning, gaining against the broadly weaker euro, but consolidating against the dollar after Bank of England official David Miles said attempts to tame the inflation too soon risk affecting fragile economic recovery. Mr Miles said yesterday that although the inflation will be above the 2% target for the most of 2012, the weakness in the UK economy is likely to persist making it hard for the policymakers to increase the base interest rate above record lows. Looking ahead to today, the only noticeable economic release is the CBI Reported sales figures. The expectation for July headline sales number is to come in at 2, improvement from –2 in the previous reading.
The euro dropped across the board during the overnight trade on concern that Europe will struggle to contain its debts crisis. The single currency dived after Standard & Poor’s lowered Greece to CC and said that nation will partially default once European officials implement a second bailout plan. Looking to the economic docket in the Eurozone today, consumer confidence headline the economic calendar with the expectations for the figure to remain unchanged at –11.4 in July. Expect for the single currency to remain under pressure as European debt crises threatens to spread over the region.
The dollar gained slightly against most of its major rivals before the House of Representatives vote today on a debt-ceiling increase in the Senate. Treasury Secretary Timothy Geithner said that US will run out of options in preventing a default on August 2 if the debt-limit isn’t raised. Also scheduled for today is weekly initial jobless claims numbers, which are likely to consolidate to 415,000. Expect the greenback to remain under pressure as lawmakers try to find unified solution at spending-cut plans.
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