Sterling remained on the backfoot in early trading after inflation data released this morning missed economists estimates. The cost of living in the UK represented by the Consumer Price Index for July came in at 2.0% which was below the 2.2% expected, while the core inflation gauge which excludes food and energy also fell short of the consensus forecast. This is perhaps good news for the Bank of England as last month’s figure hit their annual target.


The EUR has recovered slightly against the dollar but remains within range of the 2021 low hit in March. Delta variant cases are continuing to build in Germany. New cases have risen to their highest level since May and underscore a worrying trend with the 7 day incidence rate rising to 40.8 and above the key threshold set out by the German government of 35.0. Eurozone inflation data for July is due for release this morning.


Federal Reserve Bank Chairman Jerome Powell said it remains unclear whether the heightened outbreak of the Delta variant will have a noticeable impact on the US economy in a web broadcast to teachers and students on Tuesday evening. Powell refrained from any significant policy comments and focus will now be on the release of Central Bank minutes from their last meeting released this evening.

Economic Calendar

9.00 am EUR CPI
7.00 pm US FOMC minutes