- Pound (GBP) edges lower ahead of composite PMI
- BoE’s Saunders to speak
- Euro (EUR) slipped despite high PPI inflation
- Eurozone retail sales, composite PMI
The Pound Euro (GBP/EUR) exchange rate is edging a few pips lower on Friday after solid gains in the previous session. The pair settled 0.38% higher on Thursday at €1.1772 towards the high of the session. At 05:45 UTC, GBP/EUR trades -0.03% at €1.1769. The pair is set to end the week approximately where it started.
The pound pushed higher for a second straight session without any particularly strong reason. In fact the pound was notably short of catalysts in the previous session with a light economic calendar and no BoE policy makers speaking.
Today attention is firmly on the composite PMI which is expected to tick down marginally in November to 57.7, down from 57.8.
In addition to the data BoE policy maker Saunders is due to speak. Investors will be paying close attention to what he has to say as bets of a UK rate hike in December have eased in the last week amid the discovery of Omicron.
The Euro eased lower despite surging inflation at wholesale level. The PPI inflation gauge surged to 21.9% in October year on year, up from 16.1% in September. This was well above the 19% forecast and suggests that inflation levels still haven’t peaked. PPI inflation is often considered a precursor for consumer price inflation. In which case, CPI which is sat at 4.9%, a 30 year high, could in fact go higher.
Today the economic data continues to roll in with the release of eurozone retail sales and the composite PMI, a good gauge of business activity. Retail sales are expected to grow buyt at a slower rate, as price rises hit demand. Meanwhile the composite PMI is expected to confirm the preliminary November reading of 55.8, an increase from October.
In addition European Central Bank President Christine Lagarde is due to speak, with PPI and CPI so elevated the pressure is mounting on the ECB to act.
