Published: 10/08/2022 By ECAP
Sterling was largely unaffected across the majority of yesterdays trading, as markets remain cautious over todays US inflationary data. The UK political saga continues, but took a turn overnight as Chris Skidmore changed sides from Sunk to Truss citing that Sunak's campaign lacked consistency. Truss also stated yesterday that she favours tax cuts over Sunak's £15bn energy bill, with the energy argument coming to the forefront yesterday from the statement made by the Department of Business, Energy and Industrial Strategy outlining the potential for blackouts in homes and businesses under their "worst case scenario".Eyes remain firmly on todays US Inflationary data, which is taking centre stage. The data forecasts are showing a contraction in the headline and slight growth in the core number. Headline inflation is forecast to hit 8.7% from 9.1% and core to post 6.1% against a previous 5.9%, if we see headline hold around the 9% figure (some forecasts suggest this) then we should see the USD weaken further. With the lack of price movement from the very positive US Non Farm Payroll figures last Friday, anything positive from the US today showing a contracting inflationary figure, would suggest some potential big gains for USD bulls.