This week: GBPUSD await UK CPI

“Cable” traders (“cable” is the nickname for GBPUSD) are sizing up the economic data out of either side of the pond, in the lead up to the Federal Reserve and Bank of England’s (BOE) respective September policy meetings. Of late, there has been surprising resilience out of both the US and UK economies.

The Bloomberg FX model predicts a 73% chance that GBPUSD will trade within the
1.25780 – 1.28830 range over the course of this week.

Ultimately, the economy that’s strong enough to withstand further rate hikes by its central bank may see its currency strengthen.

Events Watchlist:

• Tuesday, August 15th: UK jobs market data

The unemployment rate is forecasted to come in at 4% for June, matching May’s number though still its highest since January 2022. June’s average weekly earnings is also forecasted to match May’s 7.3%. However, stronger-than-expected UK jobs data may suggest that the BOE has more hikes to go: a potential GBP booster.

• Tuesday, August 15th: US July retail sales

In a sign of defying the Fed’s aggressive rate hikes, US consumers are expecting to boost retail sales to a 0.4% month-on-month growth. If so, that’s double the pace of June’s 0.2% m/m print! GBPUSD may fall on the stronger dollar is markets sense that such resilient consumer spending could invite a September Fed rate hike.

• Wednesday, August 16th: UK July consumer price index (CPI)

Headline CPI is expected to moderate to 6.7% year-on-year, compared to June’s 7.9%. Yet it’s the core print that’s expected to stay stubbornly elevated at 6.8%, just a slight tick down from June’s 6.9%, that could give policymakers the bigger headache. Lower-than-expected CPI prints though should weigh down on GBPUSD.

• Wednesday, August 16th: Minutes for July FOMC meeting

We already know that the Fed triggered a 25-basis point hike last month, before Fed Chair Jerome Powell then went on to bore markets by repeating his “data dependent” stance during his press conference. However, dovish signals out of the FOMC as uncovered in the meeting minutes may allow GBP to take advantage of USD.

Here’s comprehensive list of other key economic data and events due this week

Tuesday, August 15

• JPY: Japan 2Q GDP
• AUD: RBA meeting minutes
• CNH: China July industrial production, retail sales, unemployment
• EUR: Germany/Eurozone August ZEW survey
• GBP: UK June unemployment
• USD: US July retail sales; speech by Federal Reserve Bank of Minneapolis President Neel Kashkari
• CAD: Canada July CPI

 

Wednesday, August 16

• CNH: China July new home prices
• NZD: RBNZ rate decision
• EUR: Eurozone 2Q GDP and employment data; June industrial production

• GBP: UK July CPI
• USD: FOMC meeting minutes; US July industrial production

 

Thursday, August 17

• JPY: Japan July external trade
• AUD: Australia July unemployment
• NOK: Central Bank of Norway rate decision
• EUR: Eurozone June trade balance
• USD: US weekly initial jobless claims

 

Friday, August 18

• JPY: Japan July CPI
• EUR: Eurozone July CPI (final)
• GBP: UK July retail sales