On Monday, the GBP/USD continued its rise for the second session as the improvement in the general sentiment after Merkel-Sarkozy meeting came out with an agreement between the leaders to introduce a plan which includes new measures to alleviate the Greek debt dilemma, recapitalize banks capital and speed up economic coordination in the euro area by the end of the current month, probably before the G20 summit in Cannes on November 3-4. With serious talks between the region’s two largest economies’ leaders and improvement in U.S. data, especially last Friday’s non-farm payrolls report, hopes increased that the recovery curve is rebounding which damped demand on the dollar as a refuge. However, the GBP/USD pair may face downside pressure in the coming period as the announced expansion in the APF by 75 billion pounds to 275 billion pounds will increase the supply of the sterling in the market, thereby causing it to depreciate. On Tuesday, as of 08:30 GMT, the U.K. will release important data; manufacturing production for August is predicted to drop 0.1% from 0.1% rise in July, while industrial production is estimated to advance 0.1% compared with the prior 0.2% fall. For the US, there will be no fundamentals. Probably, the pair will be most affected by the latest developments from the euro area as the main focus is now on this hot spot to see European officials’ ability to shore up their debt-mired economies.
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