Yesterday, the pound almost completely repeated the acrobatic sketch performed by a single European currency. And if the reverse movement to the top is more or less clear, since in both cases the whole thing is in the news from the US, then the pound declines on its own initiative. Not only that in the UK disputes over the agreement on the withdrawal of the United Kingdom from the European Union have escalated, the growth rates of industrial production slowed down from 1.6% to 0.8%, but they were waiting for the acceleration of growth to 1.9%. In addition to all the final data on GDP for the first quarter confirmed the fact of a slowdown in economic growth from 1.3% to 1.2%. So it becomes clear that divorce with Europe for the UK will not do without consequences.
However, everything returned to where it already began towards the evening. his is due to two news from the US. The first was data on open vacancies, whereas the number fell from 6,840 thousand to 6,638 thousand. given the recent data on unemployment, a reduction in the number of open vacancies suggests that it is not yet worth waiting for the decline in the unemployment rate. On the contrary, the probability of its further growth is high. The second news was the statements of Donald Trump. The US president once again told the Europeans that they are not fulfilling their NATO commitments, or rather are spending too little on maintaining a military alliance. The forty-fifth president of the USA asked a direct question about when Europeans intend to compensate the US for losses. That is, Donald Trump once again invoices Europe for payment. Also, Americans seemed to have few of those duties, which they introduced in relation to goods from China for a total of $ 50 billion, and they decided to expand the list of goods by another $ 200 billion. Everyone understands that the response will follow and they do not bear anything good for American business.
Today, there is the data on producer prices in the US, wherein growth rates should accelerate from 3.1% to 3.2%. On the eve of the publication of inflation data, this is a pretty good result, as it confirms the assumptions of market participants that inflation in the US continues to grow. True, the growth rate of average hourly wages is lower than inflation, which can lead to a decrease in consumer activity. However, it is this development that may force the Fed to double the refinancing rate twice before the end of this year. Thus, the acceleration of the producer price growth rates will be welcomed with optimism. Also, the enthusiasm for the Fed being able to raise the refinancing rate more actively will allow ignoring data on commodity stocks in wholesale warehouses, which should grow by 0.5%.
If the data on producer prices coincide with the forecasts or will be better, the pound will drop to 1.3215. However, If it turns out that the rate of growth in producer prices in the US is declining, the pound could rise to 1.3350.