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Is the BoE still on track for a rate hike next month?

business-articlesIs the BoE still on track for a rate hike next month?
  • BoE’s Haldane to speak
  • US PPI figures may pressure US dollar
  • AUD may slide on confidence figures
GBP investors await Haldane speech

The Bank of England’s (BoE) Chief Economist Andy Haldane is set to speak later this morning, with investors hoping to learn more about the bank’s upcoming monetary policy.

Current forecasts suggest that the BoE is targeting a May rate hike, something that was strengthened by the release of some upbeat house prices figures yesterday.

While any further hints from Haldane on the possibility of a rate hike next month are likely to be welcomed by markets, with the May hike being largely priced in, any gains for the pound may be limited.

This means Sterling could still face some weakness should Haldane appear a little more cautious in his long term outlook.

US producer price growth to slow?

The US dollar may stumble later this afternoon, following the release of the latest domestic producer price index (PPI).

Economists forecast that the latest figures will show price growth slowed from 0.2% to 0.1% in March as prices continue to weaken after surging 0.4% in January.

Analysts suggest that the reading may be undermined by another decline in goods prices, after they fell 0.1% in February.

However another strong uptick in the price of services could help to offset this, with USD likely to strengthen if producer prices remain steady.

AUD may fall on consumer confidence figures

The Australian dollar may slide in overnight trade today when the latest reading of consumer confidence is published.

Analysts predict that the confidence index will have continued to hold around 103 this month, despite improving personal finances on the back of solid employment growth.

Observers point to growing pessimism in Australians’ outlook regarding the domestic and global economy, with many being spooked by frequent headlines regarding trade tensions and volatility in the global stock market.

Upcoming Data

Tuesday, 10 April, 2018
10:30                     GBP Haldane Speech
13:30                     USD PPI

Wednesday, 11 April, 2018
01:30                     AUD Consumer Confidence
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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