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Market Update

• Posted by currencies in Bank of England, Currency, Dollar, Economy, EUR, Fed, GBP, Inflation, Rate Cuts, Rate Hikes, Sterling, UK, Uncategorised
• August 31, 2023
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Inflation is the main talking point today with Euro-Zone inflation due out at 10am this morning. Yesterday Germany released their August Inflation figures, with a slight decline from 6.2% in July to 6.1% last month. Coupled with Price Growth in Spain hitting a 3 month high, markets are now increasing the possibility of The European Central Bank raising interest rates again in September. If the ECB were to go ahead with a rate hike next month it’ll be the Tenth consecutive hike by The Bloc.

Sticking with Inflation, this afternoon we have Euro-Zone inflation which as it stands is expected to drop by 0.2%, coming in at 5.3%. However, with Germany contributing 40% of The Euro-Zone’s economic performance, it wouldn’t come as a surprise if overall Inflation in Europe was to stagnate or only drop ever so slightly. We then round up the European data today with Germany’s unemployment figures, with the unemployment rate forecasted to climb by 0.1%, touching 5.7%. Both data sets will no doubt play a key part in The European Central Bank’s thinking in regards to next month’s Interest Rate meeting.

Later this afternoon, the attention turns to The US Dollar, after suffering a drop against the major currency pairs, with indications showing a cooling in both spending and hiring in The US. The focus now lays heavily on The Personal Consumption data released later today and the all-important Non-Farm Payroll data which is due out on Friday afternoon. Personal Consumption Expenditure is expected to have strengthened in July further which could be a concern for Inflation, whilst Non-Farm Payroll is forecast to have seen 17,000 lesser jobs created when comparing to earlier this month.