Whilst last week saw a multitude of economic publishing’s for the US, this week will only see the release of the Consumer Price Index (CPI) report which is out on Tuesday.
This provides an insight into the price movements of goods and services. A typically high reading shows the cost of living increase and therefore shows economic development and therefore could potentially give rise to further strengthening of USD rates.
With previous releases showing a rise in the CPI of 0.1% month-on-month, it can be expected that this release may follow a similar pattern and therefore, provide further strength against other currency pairings. This could be the boost the USD needs to break through the 1.20 barrier set for the GBP/USD pairing.
US/China trade war tension builds
Whilst there has been few developments in regards to Brexit, the same cannot be said for the US China trade war.
US President Donald Trump has stated that he is ready to “dig in” to the trade war well into late next year which would be leading up to the end of his presidential tenure in November 2020.
This follows, Trump accusing China of manipulating their currency so that the strength of the Yuan (Renminbi) is more in line with their current economic projections which is seeing signs of a GDP slowdown.
There have now been calls for the International Monetary Fund (IMF) to get involved to “eliminate the unfair competitive advantage” China has created for itself in the battle of the world’s two greatest superpowers.
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