Gentium FX | Daily Report - 5th January 2023 - PM Sunak Pledges to Halve Inflation
GBP: Yesterday, Prime Minister Sunak announced five strategic targets for the government to achieve this year which included, halving inflation levels and returning the country to economic growth. Some economists believe that inflation could fall halfway through the year although households are likely to still face higher interest rates on mortgages. This morning, The Bank of England’s Decision Maker Panel survey will be released which analyses businesses inflation expectations. Although the Pound saw some more strength yesterday, it has started on the backfoot this morning.
EUR: Lower than expected inflation data releases from both France and Germany is being credited to the fall in energy prices. Today, Italian inflation figures will be released before tomorrow’s Eurozone consumer price index inflation December figures. Some analysts believe that EURUSD is likely to trade in tight range until tomorrow afternoon’s US labour market data is released.
USD: The Federal Reserve meeting minutes published last night showed that policy makers aren’t currently thinking about cutting interest rates in 2023 and that more evidence is needed to show that inflation has peaked already for this to happen. As a result, the Dollar is trading slightly stronger against the Pound this morning. Later today, ADP non-farm employment change figures will be released which is expected to show a release of 152K whilst unemployment claims data is due shortly after.?
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