After a week seeing GBP in red since the start of Monday, we have now reached Friday. The Friday session started off with core inflation and inflation rate for Japan. Even if we did see both core inflation and inflation rate fall since May, the levels for June are still significantly above its target rate of 2% – both coming in at 3.3%. Noticeable is that even if we take out food and fuel from the equation – we can still see a high level for inflation. BoJ indication that domestic demand is the driving factor, and a concern for BoJ to get its inflation levels lower. A demand-driven price pressure will continue to be a key factor for BoJ to oversee. This has also led to speculations if there is further action required from Bank of Japan to inflate its interest rate levels.
This morning, we did also have PPI (producer price inflation) for Germany. Year-on-year for June, we did see fall back to -1.3%, indicating that inflation has slowed down for Germany and Europe in the last year. While we did see an uplift month-on-month from May to June by 0.1%. Main reason that we have seen a sharp decline for the year is that energy prices are down by 6.4%. Europe and the EUR continue to show stability and has not been much effected after its release.
In the afternoon session we do have US data, for the housing market, with building permits and housing starts. Forecast suggest a slight decline for building permits, while housing starts can see small uplift.
GBP/EUR 1.1537 GBP/USD 1.3427 GBP/AED 4.9338
GBP/AUD 2.0605 GBP/CHF 1.0770 GBP/CAD 1.8433
GBP/NZD 2.2515 EUR/USD 1.1625 GBP/ZAR 23.7679