Inflation data threatens to send pound sterling lower this week

UK data was sparsely distributed last week, leaving the pound largely in reactionary mode. Sterling benefitted from global risk aversion, due to the escalating military tensions between the US and North Korea. Overall, however, it was hard to escape the UK’s gloomy economic outlook.

GBP/EUR is trending around €1.0995 - barely above the seven-and-a-half-year low struck on Friday. GBP/USD has slumped to US$1.2957 this morning.

Will UK inflation data tomorrow put the prospect of a UK interest rate hike this year back on the table, or send the pound lower?

Pound takes a break from pessimism to benefit from global risk-aversion

A continued pessimistic outlook for the UK economy, coupled with political uncertainty regarding Brexit, weighed on the pound amidst a week of sparse domestic data. Global risk-aversion midweek gave the pound a shot in the arm, however.

Euro shakes off military tensions on confirmation of solid German inflation

The euro may have slumped midweek on geopolitical fears, but solid German inflation figures helped the common currency to pick itself up again by the end of the week versus most of its peers.

USD boosted by US-North Korea tensions - until Friday’s inflation data

Military tensions cranked up several notches last week between the US and North Korea. USD enjoyed a boost as markets fretted over the possibility of nuclear war, until the interest rate outlook became the primary concern again on Friday.

AUD and NZD weaken on global risk-aversion

Tension between the US and North Korea last week caused markets to desert the risky Australian dollar and New Zealand dollar. The outlook on monetary policy for the antipodean nations wasn’t particular rosy either, giving markets even less of a reason to buy AUD or NZD.