This morning, the British pound remains in a strong position after guidance from the Bank of England that rates may have to rise sooner rather than later. These comments sparked a surge in the pound, with the likes of the GBP/USD rallying over 1% and the EUR/GBP slumping further.
Overnight markets also had to content with the latest ‘shot across the bows’ from North Korea with another missile overshoot. Markets seem to have shrugged this off though with the likes of the USD/JPY rallying to erase yesterday’s losses.
Yen pairs are generally on the rise, led by the GBP/JPY.
The dollar pairs are mixed to negative, with the exception of the GBP/USD which remains firmly in the black.
We start the day with MPC member Vlieghe speaking at 09.50.
Following this, we get US core retail sales and Empire State Manufacturing Index, released at 13.30.
At 14.15, we get US Capacity Utilisation Rate and Industrial production.
Preliminary UoM consumer sentiment follows at 15.00.
The pound has rallied hard over the last 24 hours, but historically the Bank of England’s bark has been worse than its bite.
This could see the pound’s recent spike to reverse.