020 7898 0500The US dollar suffered further losses against sterling yesterday as BoE policymaker Gertjan Vlieghe reinforced the idea that UK interest rates would have to rise soon and likely more than once. In addition, there was some disappointing data from the US as retail sales unexpectedly fell by 0.2% in August, against an expectation of a 0.1% rise.
However, Hurricane Harvey can at least partly be seen as a cause as it wreaked havoc and caused significant disruption. Having said this, there was a 0.3% rise in July so it is quite a drop. Consumer confidence in the US is currently close to record highs so it is reasonable to expect retail spending to recover in the next few months, but nobody can be sure.
Industrial production also fell in August. The 0.9% drop came against an expectation of a 0.1% increase, while manufacturing output also sank by 0.3%, when a 0.3% increase had been forecast. This had led many to believe that another 2017 US interest rate rise is unlikely at best.
It’s a quiet start to the week for US economic data, but things heat up on Wednesday. We have the existing home sales but then the main highlight of the week: the Federal Reserve’s interest rate decision. We’ll also see the FOMC’s economic predictions followed by the Fed press conference. An exciting day for the markets.
