The highly anticipated UK July Inflation data is set to make a mark as its expected to rise, with the CPI expected to rise to 9.8% YoY vs. 9.4% YoY in June. On the other hand, the Unemployment Rate is expected to stay strong at 3.8% for June, despite inflation.
The Bank of England suggested they expect a recession coming from Q4 2022 to Q4 2023. In addition, the BOE is expecting to raise rates by another 50 bps at its September meeting if this CPI report is stronger and unemployment data is weaker.
Poor manufacturing and higher inflation data is affecting the USD this week, making it a currency traders should be watching this week. Last week’s CPI print was lower than expected sending the US Dollar Index down as well to 105.19. However, a better than anticipated Michigan Consumer Sentiment print for August and a rate cut from China helped the DXY rebounded to above 106.00. Lots to look forward to this week including Retails Sales, but important to note that all trade carries risk.
Please see the following link to see a more technical standpoint of how the GBP/USD might react: