{"id":35990,"date":"2022-08-12T09:26:06","date_gmt":"2022-08-12T06:26:06","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=35990"},"modified":"2025-12-11T15:14:20","modified_gmt":"2025-12-11T13:14:20","slug":"us-dollar-plunges-on-slow-cpi","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/en\/us-dollar-plunges-on-slow-cpi\/","title":{"rendered":"Daily Key points: UK braces for GPD data"},"content":{"rendered":"\n

The sterling was roughly flat yesterday against the US dollar but fell however against the euro portraying a clearer picture on the state of UK\u2019s economy ahead of the growth reports. Today we expect the release of the UK\u2019s preliminary quarter on quarter GDP rate for Q2 and the month-on-month GDP rate for June. The quarter-on-quarter GDP rate is expected to drop to -0.2% from 0.8% as well as the June\u2019s month on month GDP rate which is expected to drop to -1.3% from prior 0.5%. Given the above estimates, should the actual rates meet their respective forecasts we may see GBP weakening, giving an end to its short-lived price appreciation against the dollar for the past month. With the results indicating a slump into the negatives both on quarter on quarter and month on month basis, not only highlights the fragility of the UK\u2019s economy but also validates concerns and shortens the time horizon of an impending recession, rather sooner than later.  Bank of England\u2019s Chief economist Huw Pill in an interview previously this week acknowledged that hiking interest rates to fight inflation will slow growth, arguing that it is a necessary step towards stabilizing the economy over the long term. With inflation hitting a 40 year-high the BoE is determined to put a stop to the upward spiral of prices, risking in the process, tipping the economy into a recession. Bank of England feels the pressure to keep up with rate hikes as it fears it may fall behind, as it plays catch up with the rate of which the Fed is moving forward. In our view, not only BoE also other central banks around the world are caught lagging behind and we believe that efforts towards synchronisation with the US are to come. On another note, we also would like to highlight China\u2019s year on year Industrial Output and year on year Retail Sales growth rates both for July, to be released on Monday\u2019s early morning session. Expectations for the Industrial output growth rate, point to an increase to the 4.6% from 3.9% level, and Retail sales expectations indicate an increase to 5% from 3.1%. Should the actual rates match the forecasts, we may see the Aussie getting a boost due to the close interlinks of trading activity between China and Australia and given that the release could imply an acceleration of the expansion of economic activity for the Chinese industrial sector and at the same time a rather robust internal market, both of which could boost Australia\u2019s exports.<\/p>\n\n\n\n

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