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Strong US Inflation Data Doesn’t Stop GBP/USD Rocketing

Last week’s high: $1.3675

Last week’s low: $1.3461

US Dollar Can’t Hold Gains even after Strong Inflation Data

Friday saw US core inflation surprise with an uptick to 1.8% against forecasts of a hold at 1.7%, boosting the odds of an interest rate hike from the Federal Reserve. But anticipation ahead of the data release had weakened USD and many commodity currencies, making GBP an appealing asset. By the time the data was released, Sterling had become too attractive an asset and the US Dollar lost around -1%.

USD Outlook: Fed Speeches to Dominate in Quiet Data Week

The coming week is unusually quiet in terms of US economic data, with Friday’s University of Michigan sentiment index the only tier-one release on the calendar.

This means the major developments will be Fed speeches; officials Charlies Evans and Loretta Mester are due to speak on Wednesday.

Sturdy odds of an interest rate hike taking place in March could also provide some underlying support for USD.

Key Events

17th January

14:15 USD Industrial Production (MoM) (DEC)

20:00 USD Fed’s Evans Speaks on Economy and Monetary Policy

21:30 USD Fed’s Mester Discusses Monetary Policy Communication


18th January

13:30 USD Housing Starts (MoM) (DEC)

13:30 USD Building Permits (MoM) (DEC)

3:30 USD Initial Jobless Claims (JAN 13)

13:30 USD Continuing Claims (JAN 06)


19th January

15:00 USD U. of Mich. Sentiment (JAN P)


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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

Arron Morris

Senior Currency Broker
T: 01442 892 065

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