01/09 – Euro inflation picks up

01/09 – Euro inflation picks up

GBP: Sterling moves as a by-product of other currencies

EUR: Inflation picks up in Europe to 3%

USD: Dollar edges off in month-end volatility 


Yesterday, the UK was very quiet in terms of data and sterling appeared to move as a by-product of other currencies. This morning the UK’s manufacturing PMI came out above expectations, however this has had little to no impact on the currency markets.


CPI came out from across Europe yesterday. The CPI and core CPI both exceeded the market expectations, coming in at 3% and 1.6% respectively. It has been rare for inflation to be above the ECB’s target, and now the market will start to question whether an interest rate rise or tapering will need to take place in Europe. The ECB expects inflation to peak later in the year, so the euro could strengthen if the trend continues.


Yesterday the dollar was relatively volatile following on from Fed Chair Powell speaking on Friday at Jackson Hole. This coupled with it being month-end led to the dollar edging off as dovish tones had surprised the market on Friday. Chicago PMI and CB consumer confidence were also below market expectations, which may have contributed slightly. Eyes will be on the US this Friday with the jobs figures being released then.


Noticeably overnight we saw the Australian dollar strengthen as GDP came out above market expectations. This is despite the backdrop of a slowdown in China.

Market rates

Today’s Interbank Rates at 09:58 against sterling. Movement vs Friday.

US dollar$1.375 
Australian dollar$1.872 
South African randR19.85 
Japanese yen¥151.8 

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.